Status of initiatives in FY2023
1. Formulation and publication of customer-oriented business operation policy
In order to realize customer-oriented business operations, we have been making efforts to ensure the penetration and thoroughness of this policy throughout the company.
We have verified the status of our efforts in FY 2023, and would like to report the results as follows.
2. Pursuing the best interests of Customers
We acquired and sold multiple properties* as part of our external growth strategies, while increasing rents and making timely and appropriate capital expenditures to increase asset value as part of our internal growth strategies. In terms of financial strategy, we negotiated with financial institutions to minimize the impact of rising interest rates on borrowings as much as possible.
Based on the above points, we have strived to achieve stable profit distribution.
* Since MPR is an unlisted investment corporation, only its unitholders can access MPR’s customer website using a dedicated ID or PW to view relevant information, etc. (the same applies hereinafter).
(Note) In order to pursue the best interests of Customers, the Company has assisted qualification acquisition, and promoted the participation in various training/seminars with the aim of our employees acquiring specialized knowledge and experience. Regarding the actual number of qualified persons in the Company, we have 38 real-estate transaction specialists (as of the end of March 2024) and 26 ARES Certified Masters (as of the end of March 2024).
3. Appropriate management of conflicts of interests
We confirmed 9 interested parties’ transactions, which have a high risk of the occurrence of conflicting interest transactions (as of the end of March 2024) in FY 2023. We held the Legal Compliance and Risk Management Committee 10 times (as of the end of March 2024) and the Investment Committee 34 times (as of the end of March 2024) in FY 2023, where we, including outside experts, deliberated and resolved the matters in advance to confirm that conflicting interest transactions did not occur. In addition, we conduct the internal audit once a year to verify conflicting interest transactions from multiple aspects as well.
In addition, we have been operating the management system appropriately based on the internal rules.
(Note) The contents stated in items 1 to 4 have been considered by the deliberation or resolution at the Investment Committee and the Legal Compliance and Risk Management Committee.
4. Clarification of fees
We have been making efforts to provide Customers with appropriate information about the details of the handling fees such as the management fees we receive from Customers. We clearly state the handling fees in the contract after consultation with Customers in advance.
5. Provision of important information in an easy-to-understand manner
We have been making efforts to provide and disclose important information that may affect investment decisions to Customers in an accurate and fair manner.
(Note 1) 1. For example, the following items are provided as important information in an easy-to-understand manner:
• NOI
• Acquisition price
• Expenses pertaining to assets
• IRR
• Real estate appraisal value
• Dividend yields
(Note 1) 2. For MPR, only qualified institutional investors are considered as Customers. For the Private Funds, professional investors and juridical persons with knowledge and experience equivalent to them are considered as Customers.
(Note 1) 3. For MPR, the contents are posted individually on the Customers’ dedicated website. For the Private Funds, the contents are disclosed to Customers for each asset in advance, in principle, and they will make a final investment judgement based on Q&A.
(Note 1) 4. For MPR, the contents are posted individually on the Customers’ dedicated website. For the Private Funds, the contents are disclosed to Customers for each asset in advance, in principle.
(Note 2) As described above, the Company does not sell or promote multiple financial instruments/services as a package.
(Note 3) to (Note 5) Regarding the transaction experience and financial knowledge of Customers, provision of information according to complexity of financial instruments, and differentiation of importance, we have strived to provide important information in an easy-to-understand manner, using IR activities and materials published on HP, etc. IR activities were conducted 65 times for the 18th MPR FP (from Feb. 1, 2023 to Jul. 31, 2023) and 73 times for the 19th MPR FP (from Aug. 1, 2023 to Jan. 31, 2024). During the applicable period, we published two asset management reports and two financial results materials and released 48 pieces of information for Customers.
6. Provision of services suited for Customers
The Company has striven to understand the business purposes and needs of Customers, and carry out asset management in accordance with them. We have also focused on IR activities so that the status of such asset management can be easily understood by Customers.
(Note 1) 1. MPR
We establish the standards of the overall portfolio in the management guidelines, and carry out management in accordance with them.
In acquiring assets under management, we compare the acquisition as real estate trust beneficiary rights of financial instruments with the acquisition as direct real estate, and consider which contributes to the interests of investors.
We regularly grasp the needs of investors through IR activities, and carry out management based on the intention of investors.
(Note 1) 2. Private Funds
We confirm the business purposes, etc. of Customers by the customer card that Customers fill out in advance.
We prepare the management standards for each asset under management based on the intention of Customers.
In acquiring assets under management, we compare the acquisition as real estate trust beneficiary rights of financial instruments with the acquisition as direct real estate, and consider which contributes to the interests of investors.
In forming the Private Funds, we consider multiple structures beyond the framework of each law and then adopt the structure that contributes most to the interests of Customers.
(Note 1) 3. Even after acquisition of assets, the Company continuously engages in management operations, and has consultations, etc. with Customers as necessary to provide the appropriate follow-up support.
(Note 2) As described above, the Company does not sell or promote multiple financial instruments/services as a package.
(Note 3) For MPR, only qualified institutional investors are considered as Customers. For the Private Funds, professional investors and juridical persons with knowledge and experience equivalent to them are considered as Customers.
(Note 4) In acquiring assets in accordance with any unusual structure or process of asset acquisition, we prepare the detailed internal materials (including but not limited to materials of the Investment Committee and materials of the Legal Compliance and Risk Management Committee) individually for each case to make a final decision after explaining to the relevant parties.
(Note 5) We have provided our employees with regular training, and strived to have them deepen the understanding concerning the structure, etc. of financial instruments they handle. We held internal training or participated in external training a total of 42 times (as of the end of March 2024) in FY 2023. We have actively provided information to Customers on the Customers’ dedicated website or through individual consultations, etc.
7. Framework for appropriately motivating employees
We recognize the importance of maximizing Customers’ profits by carrying out our business operations with integrity and fairness based on high ethical standards and by providing high quality services supported by high levels of specialized knowledge. To accomplish these tasks and to ensure that our employees are able to achieve high levels of expertise and standards, we have continuously provided education and training to our employees. In addition, in accordance with the compliance program approved by our Board of Directors, we have provided compliance training for all employees on a regular and continuous basis with the aim of improving the governance structure.
(Note) We make sure to foster more employee awareness of compliance than before by clearly stating the matter concerning compliance in the performance evaluation items. In addition, we have provided new employee training to all employees that newly entered the Company, and have provided compliance training for all employees at least twice a year, in principle. To ensure that our employees are able to achieve high levels of expertise, we have promoted qualification acquisition of real-estate transaction specialists and ARES Certified Masters. Regarding the actual number of qualified persons in the Company, we have 38 real-estate transaction specialists (as of the end of March 2024) and 26 ARES Certified Masters (as of the end of March 2024).
Please see below for past resolutions.
・Status of initiatives in FY2023