Tuesday, 21st February 2017
In February 2017, news on Japanese companies acquiring the stakes of overseas asset managers or forming strategic investments have come up.
SoftBank Group announced that they will acquire New-York based Fortress Investment Group for approximately $3.3 billion. As most of Softbank’s investments lie in technology firms, their decision to invest in the asset management, real estate, and private equity business was an surprising news, and show the widening of real estate and private equity investments for Japanese investors.
According to IPE real estate, Mitsubishi Estate has given a $300 million mandate to Hong Kong-based alternative asset management firm CLSA Capital Partners to source core real estate in Asia-Pacific region. This shows Mitsubishi Estate is extending its arms to Pan-Asia real estate, adding to its existing asset management platforms in US and Europe through its overseas subsidiaries.
Mitsui & Co. announced that they are entering strategic partnership with Los Angeles-based CIM Group, a US urban real estate and infrastructure fund management firm, by acquiring 20% interest in CIM and also investing in several funds managed by CIM. Mitsui & Co. established special purpose entity for this partnership and will invest around $450-550 million in total. Mitsui will also strongly support marketing activities of CIM’s funds to the Japanese market, with an aim to raise several hundred billion yen of new capital from Japanese investors in the coming years.
Mitsui & Co. mentioned in its press release, “In Japan, due to poor performance caused by lasting low interest rates, Japanese investors’ capital is expected to flow increasingly into overseas real estate and infrastructure investments.”
What does this mean?
Why strategic investment via overseas fund managers?
Although Japanese investors are showing a strong demand for overseas real estate investment opportunities, Japanese conglomerates and asset management companies are struggling to meet these needs.
Japanese institutional investors such as pensions funds are required to invest through Japanese gatekeepers or asset management companies, and for this an established track records is a standard requirement.
However, most of Japanese asset managers have not touched global real estate for 2-3 decades, and as such there is an limited track record for funds covering the overseas real estate sector.
By formulating a strategic partnership with a well established overseas real estate fund manager, this is an efficient way for a Japanese fund manager to obtain a reputable track record that can secure the interest of Japanese investors.
Strategic investment/partnership is FAST PASS to enter into overseas real estate asset management
The race for Japanese asset managers to catch domestic investors demand for overseas investment has begun, and strategic investment by Japanese investors and asset managers is accelerating.
Asterisk is working with their local partner as well as other Japanese investors on strategic investments and specifically looking to partner with overseas asset managers to create tailored vehicles to invest to global hospitality assets.
To view our past newsletters, please visit our website : http://japanplacementagent.com/en/
About Asterisk Realty & Placement Agency
Asterisk is a private fund placement agency for global alternative in Japan. Through our unique and extensive network of Japanese investors, we support global fund managers in accessing Japanese and Asian institutional investors (pensions, financial institutions, real estate developers, other business companies, etc.).
We provide access and strategies for overseas fund managers to bridge the gap between them and Japanese investors.
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