Outline

In the investment evaluation business, the most essential consideration is impartiality.This is because it would be impossible to consider an evaluation of the fund management skills of management companies controlling assets, or an evaluation of the investment process for investment trusts, to be fair if the company performing the evaluation belonged to the same corporate group as the management company or was itself involved in the fund management business, as this would inevitably raise questions as to the evaluation company's impartiality.

Regarding this point, R&I is totally unrelated to any management company thanks to the fact that the majority of its paidin stock is held by "Nikkei"and other Nikkei Group companies. R&I is not involved in fund management itself, and has no intention to move into that field.

The key elements of the pension management consulting business are to create a pool of investment companies or to propose suitable investment companies. In this, evaluating the capacity of investment companies is the crucial point, and the fact that R&I can do this from a position of impartiality has won it the strong confidence of pensions sponsors and other clients. In evaluating investment processes for investment trusts and other areas, even where this is entails the acceptance of fee based on a request from a investment company or a sales company, R&I upholds its position of impartiality and fairness.

The investment evaluation business was initiated as part of the business diversification strategy of one of R&I's forebears, JBRI. JBRI began research on investment evaluation methods for pension assets back in 1988, and officially started the operation in 1991.

With the need for investment consulting rising thanks to deregulation, investment company recommendation was added to the consulting menu in 1993, followed by ALM analysis in 1994.

Since then, R&I has won many clients for its quantitative analysis of investment performance, especially among the welfare pension funds of major companies, and has created a pension data universe which has proved highly reliable. Based on this foundation, R&I has steadily built up a track record in higher value-added services such as creating pools of investment companies, proposing suitable investment companies and ALM analysis. R&I has now established a solid base as a pensions consultant. In addition, R&I has earned a good reputation in management performance calculation services for investment companies.

In evaluating investment trusts, the provision of quantitative analysis reports was initiated in February 1998, and although experience in this field is therefore shorter than in the pensions management field, R&I has already established a leading position for both quality and quantity amidst the plethora of new providers of such services - both in the provision of data on individual funds and in areas such as the calculation and publication of the "QUICK-R&I Investment Fund Index" jointly developed with QUICK, the nation's largest information vendor. Since August 1998, R&I has also been providing investment trust process evaluations.

Pensions management consulting includes evaluating the investment skills of investment companies and the quality of financial products such as investment funds, and naturally this requires high levels of specialist knowledge and experience. As R&I's investment evaluation business expands, greater prominence has been given to training and hiring staff. The April 1998 merger strengthened the operational base and greatly enhanced this process.

The majority of the consultants and analysts working in the consulting and evaluation areas have qualifications such as securities analyst qualifications, and in many cases have prior experience working at foreign securities companies. One of the characteristics of R&I is the stability of the employment environment. In line with changes in the management environment and technology, as well as structural reforms, R&I runs research seminars with academics and experts enabling staff to brush up their skills and awareness - part of a constant effort to enhance consulting and evaluation skills. R&I will continue to ensure that it can, as a professional group, adequately respond to all the diverse needs of its clients.