Policy on Customer-Oriented Business Operation
ＨＯＭＥ ＞ Policy on Customer-Oriented Business Operation
Marubeni Asset Management Co., Ltd. (hereinafter referred to as “Company”) is committed to conducting its business operations in a manner that places the highest priority on the interests of investors (hereinafter referred to as “Customer(s)”) of the Marubeni Private Real Estate Investment Trust (hereinafter referred to as “MPR”) and each fund (hereinafter referred to as “Private Fund(s)”), which entrust the Company with asset management.
The Company has been working on business operations under the following management policies.
【 Management policy 】
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Maximizing investor returns
We, Marubeni Asset Management Co., Ltd., aim to maximize investor returns by fully utilizing the Marubeni Group's diverse knowledge and experience in real estate development, investment and management, providing quality investment opportunities that meet investor needs, and increasing the profitability of assets under management through providing solid asset management services.
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Internal control system to ensure compliance and risk management
Based on a high sense of corporate ethics, we comply with all laws and regulations, establish a compliance and risk management system, and strive to maintain the trust of society and the support of investors by always carrying out our business with integrity and fairness.
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Professional group with high level of expertise
We aim to provide asset management services supported by a high level of specialist knowledge, always striving to improve ourselves to provide the best possible solutions in every process of real estate investment.
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Contribution to society
As part of the Company’s corporate social responsibility, we actively participate in and practice consideration for community safety and the environment through the provision of high-quality asset management services.
The Company continues to engage in MPR and Private Fund asset management based on the Company’s management policy and in accordance with the policy on the Principles for Customer-Oriented Business Operation (including the subsequent revisions) issued by the Financial Services Agency in March 2017. The Company’s policy on this business operation is as stated below.
【 Formulation and publication of customer-oriented business operation policy 】
Principle 1.
The Company formulates and publishes this policy for realizing customer-oriented business operation, and in order to realize better business operation, continuously confirms the status of efforts at the Board of Directors meetings, etc. and revise the policy as necessary.
(Note) We conduct business operations, bearing in mind that Customers referred in this policy include not only the immediate counterparties of the contracts but also Customers as end beneficiaries.
【 Pursuing the best interests of Customers 】
Principle 2.
As a financial business operator, we maintain a high degree of professionalism and professional ethics, aim to achieve stable profit sharing to Customers through faithful and fair business conduct, pursuit of profits, and implementation of both external and internal growth strategies. In addition, we implement the “Management Policy” and strive to further deepen the policy as our corporate culture.
(Note) We ensure a stable customer base and profits by providing Customers with high-quality services supported by specialized knowledge and experience to pursue the best interests of Customers.
【 Appropriate management of conflicts of interest 】
Principle 3.
In order to accurately grasp and manage potential conflicts of interest in transactions, in addition to the provisions of the related laws and regulations, the Company established the Investment Committee and the Legal Compliance and Risk Management Committee that include outside experts and set forth “Committee Rules,” “Rules on Transactions between Interested Parties” and “Compliance Rules” as internal rules. The Company will appropriately implement the management system, including these internal rules.
In the event of a potential conflict of interests in a transaction, it is appropriate from the viewpoint of protecting the interests of Customers, to take measures such as deliberation or resolution in advance at the Legal Compliance and Risk Management Committee and the Investment Committee that include outside experts.
In addition, depending on the type and amount of assets subject to transactions, in addition to the above, prior approval of the Board of Directors of the Company and the MPR Board of Directors are required.
(Note) In judging potential conflicts of interest, the Company will consider whether 1) the prices or fees, etc. are appropriate, 2) the Company receives the fees, etc. from other companies in a transaction for Customers, 3) the transaction falls under the transaction with the Company’s stakeholders, and 4) such transaction is a reasonable and appropriate transaction for Customers.
【 Clarification of fees 】
Principle 4.
The Company provides information on the details of the handling fees, etc. received from the Customer so that the customer can understand what kind of service the handling fees, etc. are attributable to.
Examples of the major fees received by the Company are as stated below. These can either be the fixed fees or variable fees. This will be decided in each case upon consultation with Customers.
(1) Fees upon acquiring assets under management
(2) Management fees during the period
(3) Fees upon selling assets under management
(4) Brokerage fees
(5) Project management fees
【 Provision of important information in an easy-to-understand manner 】
Principle 5.
The Company is committed to providing and announcing important information that we believe will influence investment decisions in an easy-to-understand, accurate and fair manner so that our Customers can understand it.
(Note 1) Important information will include the following contents:
1. Basic earnings (return), losses and other risks, and terms and conditions of financial instruments that are subject to asset management or advice, etc.
2. Customer's attributes expected in relation to financial instruments that are subject to asset management or advice, etc.
3. Reason for selection of financial instruments that is subject to asset management or advice, etc. (including the reason for judging that it is based on the Customer’s needs and intention)
4. If there are any potential conflicts of interest with a Customer with respect to financial instruments that are subject to asset management or advice, etc., the specific content thereof (including the fees, etc. received from a third party) and the impact this has on the transactions or operations
(Note 2) Package sales
The Company does not sell or promote multiple financial instruments/services as a package.
(Note 3) Provision of information considering the transaction experience and financial knowledge of Customers
1. For MPR, the information will be provided in the asset management reports created biannually and on the Customers’ dedicated HP, in a clear and simple language. In addition, a clear and simple explanation that does not cause any misunderstanding will be made in IR activities.
2. For the Private Funds, the investment purposes and transaction experience will be confirmed by the customer card submitted by Customers, and the information will be provided according to the transaction experience and financial knowledge. In addition, a clear and simple explanation that does not cause any misunderstanding will be made in the individual consultations, etc. with Customers.
(Note 4) Provision of information, etc. according to complexity of financial instruments that are subject to asset management or advice, etc.
The information will be provided by preparing the structure diagram stating the relevant parties and related contracts as well as the table of the settlement of accounts expected, etc. so that Customers can understand the contents and return, etc. of the instruments.
(Note 5) Differentiation of importance in providing information
In providing information to Customers, the Company will bear in mind the differentiation according to the importance. For more important information, we will draw the attention of Customers by especially emphasizing it.
【 Provision of services suited for Customers 】
Principle 6.
The Company strives to understand the business purposes and needs of our Customers, including unitholders of MPR, and carry out asset management or giving advice, etc., in accordance with them. We also focus on IR activities so that the status of such asset management or giving advice, etc., can be easily understood by our Customers.
(Note) In carrying out asset management or giving advice, etc., the Company will pay attention to the following points:
1. After confirming the Customer’s intention, consider the asset type and investment return, etc. of assets under management based on the Customer’s needs, etc., and carry out specific asset management or give concrete advice, etc. in accordance with them.
2. Carry out specific asset management or give concrete advice, etc. in a cross-sectional manner beyond the framework of each law, comparing with similar instruments/services, alternative instruments/ service contents (including the fees).
3. Even after carrying out asset management or giving advice, etc., provide the appropriate follow-up support based on the Customer’s intention, in consideration of a long-term perspective.
(Note 2) Package sales
The Company does not sell or promote multiple financial instruments/services as a package.
(Note 3) In MPR’s asset management or asset management/ formation, etc. of the Private Funds, the Company will identify/publish the attributes of assumed target Customers based on these characteristics.
(Note 4) Especially when carrying out asset management or giving advice, etc. regarding complicated or high-risk financial instruments, or for Customer groups with the attributes vulnerable to damage in the financial transactions, the Company will examine more carefully whether asset management or advice, etc. are appropriate according to the instruments or the attributes of Customers.
(Note 5) The Company will strive to have its employees deepen the understanding concerning the structure, etc. of financial instruments they handle, and actively provide information to Customers so that Customers can acquire the basic knowledge regarding financial transactions according to their attributes.
【 Framework for appropriately motivating employees 】
Principle 7.
We recognize the importance of maximizing our 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. We will prepare the framework and proper governance structure to realize these tasks.
(Note) To realize these tasks and to ensure that our employees are able to achieve high levels of expertise and standards, the Company will clearly state the matter concerning compliance as one of the performance evaluation items, and continuously provide education and training to our employees. In addition, in accordance with the compliance program approved by our Board of Directors, we will provide compliance training for all employees on a regular and continuous basis with the aim of improving the governance structure.
【Policy on Customer-Oriented Business Operation】 Status of initiatives in FY 2023
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】
As for external growth, we acquired/sold six properties in FY 2023. Also, as for the implementation status of internal growth, we increased the rent for ten properties in FY 2023. In terms of the above points, we have strived to realize stable profit sharing.
(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 2023) and 26 ARES Certified Masters (as of the end of March 2023).
3.【Appropriate management of conflicts of interests】
We confirmed nine interested parties’ transactions, which have a high risk of the occurrence of conflicting interest transactions (as of the end of March 2023) in FY 2023. We held the Legal Compliance and Risk Management Committee 10 times (as of the end of March 2023) and the Investment Committee 34 times (as of the end of March 2023) 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 our Customers with appropriate information about the details of the handling fees such as the management fees we receive from our 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 our 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 our 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 our 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.
n 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 2023) 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 our 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 2023) and 26 ARES Certified Masters (as of the end of March 2023).
Please see below for past resolutions.
