Ryobi Holdings Co., a rural Japanese bus route operator, is venturing into the world of finance with the establishment of an AI-driven hedge fund focused on forex trading. This initiative comes as Ryobi seeks new revenue streams to adapt to Japan’s declining rural population, particularly outside Tokyo. The hedge fund will be managed under Ryobi’s subsidiary, Ryobi Systems Co., and is slated to commence operations at the beginning of 2025.
Founded 114 years ago in Okayama Prefecture, Ryobi initially connected small towns and villages through a short railway. Today, the company faces the challenges of Japan’s demographic decline, with over 30% of Okayama’s population aged 65 or older as of 2022, and several towns projected to become uninhabited by 2050.
To navigate this shift, Ryobi has diversified its investments into real estate, supermarkets, and other sectors. The launch of the hedge fund represents a strategic move to secure additional funding for maintaining its bus operations and expanding its business activities.
Kyosuke Suzuki, a former currency trader at Société Générale SA, has been appointed to lead the fund’s creation. Suzuki, who previously worked with Ryobi President Toshiyuki Matsuda at Sumitomo Trust & Banking Co., has spent the past 18 months testing approximately 20 AI models through ¥300 million ($2 million) in currency transactions. The aim has been to ensure the models’ effectiveness in live trading conditions.
“Our focus is on proving the system’s real-world profitability,” Suzuki, 45, stated in a recent Tokyo interview. “While simulations are useful, they must translate into actual trading success. We plan to build and market a proven track record.”
The fund will operate as a private investment trust, targeting institutional investors, financial professionals, and a select group of high-net-worth individuals, with an initial fundraising goal of around ¥5 billion.
Ryobi Systems, the division managing the fund, is a key profit generator for the group, contributing nearly half of its total ordinary income in the fiscal year ending March. The division also competes with major players like Hitachi Ltd. and Fujitsu Ltd. by providing software solutions for regional municipalities, including tax payment systems.
Looking ahead, Suzuki envisions the potential for Ryobi to expand its AI expertise into other financial services, such as banking solutions and investment advisory. “Our immediate priority is to ensure the fund’s success,” Suzuki added, highlighting the importance of establishing a solid performance track record before exploring further opportunities.
