A subsidiary of Ryobi Holdings Co, a bus operator in rural Japan, is taking an unconventional step to counter the impact of the country’s declining population by launching an AI-driven hedge fund focused on foreign exchange trading, according to a report by Bloomberg.
The move comes as the company faces shrinking communities and an ageing customer base outside Tokyo.
Ryobi has tapped Kyosuke Suzuki, a former currency trader at Societe Generale SA, to lead the development of the hedge fund, which is expected to be operational by the end of the year and begin investing in early 2025. The fund will be managed by Ryobi’s subsidiary, Ryobi Systems Co.
Founded 114 years ago as a railway connecting towns in Okayama Prefecture – situated between Osaka and Hiroshima –Ryobi is now at the forefront of Japan’s demographic crisis. Over 30% of Okayama’s population was aged 65 or older as of 2022, and some of its towns risk disappearing by 2050. To combat these challenges, Ryobi has previously diversified into real estate, supermarkets, and other ventures, aiming to secure the funds needed to maintain its bus operations.
Suzuki was brought on board by Ryobi President Toshiyuki Matsuda, after the pair met during their time at Sumitomo Trust & Banking Co, now Sumitomo Mitsui Trust Holdings Inc. Over the course of 18 months, Suzuki and a team of five engineers from Ryobi conducted JPY300 million ($2m) worth of currency transactions using the company’s capital to test the viability of about 20 AI models.
The hedge fund will operate as a private investment trust, with sales limited to institutional investors, professionals, and fewer than 50 high-net-worth individuals. According to Suzuki, the fund aims to raise around JPY5bn in its first year, targeting local business owners and financial institutions. “We would like to start small,” he said.
