The Japanese region hit by the worst nuclear accident since Chernobyl has a new backer.

“I’m now the biggest institutional investor in Fukushima,” says Curtis Freeze, New Yorker, hedge fund head and former missionary.

The 53-year-old, who oversees $352 million as chief investment officer of Prospect Asset Management Inc., has taken big stakes in two of the prefecture’s three banks, diverting much of his fund’s assets into the bets. His goal is to get the lenders to do more to revive the battered economy -- including by investing in solar.

Freeze, it turns out, has history with Fukushima. Some 34 years ago he lived there, spending his days riding a bicycle around its streets trying to spread the Mormon faith. That began a love affair with Japan that saw him start his own hedge fund, help pioneer real estate investment trusts and rescue an ailing developer. Now he’s seeking to make Fukushima’s lenders more profitable and deliver a return to his investors.

“I have a feeling for the people of Fukushima, but I hadn’t found a way to get involved until now,” Freeze said in a phone interview from his home in Hawaii, where he spends half his time. “Part of it is frustration that nobody else is doing it.”

Five years on from the earthquake, tsunami and nuclear meltdowns, more than 97,000 people remain evacuated from their homes in Fukushima, while about 18,300 still live in temporary housing. The prefecture has lost about 6 percent of its population since the disaster, and economic output in real terms is roughly where it was in 2008. Surveys have shown that few inhabitants plan to return to ghost towns such as Tomioka near the crippled nuclear plant.

“Northern Japan has been written off,” Freeze said. “Because Fukushima after Hokkaido has seen the biggest decline in population, the megabanks have no interest,” he said. “It’s kind of a microcosm of what Japan’s going through. There’s a lot of money in Fukushima, but they haven’t found a place to put the money to work.”

Compensation to Fukushima residents and businesses has often ended up in deposits, which have surged since the disaster. The problem, according to Freeze, is that banks are using some of this cash to buy government or corporate debt, or participate in syndicated loans led by the nation’s three largest banks.

Not Sustainable

“They’re lending a significant amount of money at less than the cost of money. That’s not sustainable,” he said. “They’re going to have to find better ways to do something with the money.”

For Freeze, one obvious solution is solar power. He’s the largest shareholder in Daito Bank Ltd. with a 16 percent stake, and he owns 10 percent of Fukushima Bank Ltd. The prefecture’s second- and third-largest banks should support solar plants through loans and equity investments, he says. Fukushima Bank declined to comment, while Daito Bank didn’t respond to calls requesting comment.

About 7 percent of Fukushima is still uninhabitable because of radiation, according to government data. The prefecture has set a target of being 100 percent powered by renewables by 2040, or at least to have that capability. Since the meltdowns, Fukushima has become host to the world’s biggest offshore wind turbine.

Farming, Tepco

“The area surrounding the nuclear plant isn’t suitable for farming anymore, and likewise a lot of that can’t be lived in for many years,” Freeze said. “The other reason solar power makes sense is because it’s a natural reaction to Tokyo Electric Power Co.’s disaster.”

Freeze sees the investments as a chance to do good for Fukushima and also do well for his fund’s backers. Of the cash he manages, 17 billion yen ($152 million) is for external clients, and most of that comes from about 10 investors, he says. Freeze says the banks received “indirect but powerful” aid after the disaster as reparations reduced the potential for loan losses and helped push up real estate prices. Most loans to individuals and small businesses are secured by property. He says he bought the lenders’ shares at less than half book value.

“That’s why I chose those banks,” Freeze said. “I have a fiduciary duty to my investors.”

Long-Term View

The American hasn’t declared the holdings as activist positions, and says he’ll take his time and be friendly when engaging with management. They aren’t speculative investments -- in fact, he may hold them for the rest of his life, he said. Shares have further to fall in the short term, according to Freeze, after the two firms dropped at least 13 percent in 2016 through Tuesday. Daito Bank slid 1.1 percent on Wednesday in Tokyo, while Fukushima Bank lost 1.2 percent.

“A lot of regional banks are going to come under pressure for a number of reasons over the next 15 or 20 years,” said Mac Salman, head of research on Japanese financial firms at Jefferies Group LLC in Tokyo. “One of the them is the general demographic situation. The second thing is the hollowing out of Japan, the centralization of population to Tokyo. That’s also going to put pressure on a lot of these regional banks. Then, there’s definitely a feeling that some of these regional banks have had little or no shareholder oversight.”

Freeze’s claim to be Fukushima’s largest institutional investor is hard to verify, but what’s certain is his firm is one of the biggest. The prefecture has just 11 listed companies, including the three banks, several retailers and a provider of funeral services. Their combined market value is about $2.8 billion, and Freeze’s $50 million investment makes up about 1.8 percent of the region’s listed equity. Very few other money managers are named on the companies’ registers, and with the exception of trust banks their holdings are smaller.

Investing Career

Freeze began his investment career at Nikko Securities in 1988, just before Japan’s bubble burst, and worked at two other financial firms before setting up Honolulu-based Prospect Asset Management in 1994.

In 2002, the company became the first foreign firm to receive a Japanese REIT license, with the trust listing in 2005. In 2009, Prospect’s assets plunged to as low as $150 million from a peak of more than $2 billion two years earlier in what Freeze has described as “a near-death experience.” The Prospect Japan Fund has seen a 53 percent increase in net asset value over the five years through 2015, he said.

Freeze invested in Gro-bels Co. in 2010, helping spur a turnaround in the Japanese developer’s share price. By 2014 Gro-bels had merged with Prospect Co., the company that owned Freeze’s fund management and real-estate development businesses, and he became president of the combined entity. Prospect, which is listed in Tokyo, has committed to 20 billion yen of solar-power development projects, he says.

Freeze says his stint as a missionary was as much about discovering himself as converting people to Mormonism, and one thing he learned was patience. These days, he says he’s not trying to push his views on Japanese people, but wants to use his experience to help. If he doesn’t, he says, his decades of investing in Japan will have been wasted.

“If nobody tries to make a difference, nobody makes a stance and tries to invest, what is the future of Japan?” Freeze said. “This is not about a pay check.”