We have been providing solutions to our investors as an asset manager of real estate private funds since the dawn of the real estate securitization business in Japan. Private funds usually have an investment period of 3-5 years and GK-TK or TMK structures are commonly used. In the case of long- term investments with no specific investment period, schemes involving the establishment of an investment corporation are occasionally used. In light of these trends, we began the operation of non-listed open-ended private REIT in March 2012.
A GK(Godo Kaisha), a limited liability company, is established to act as the holder of the assets to be invested. This investment scheme is used to make the purchase of trust beneficiary interests of the underlying real estate using the capital invested by investors under an anonymous partnership (TK-Tokumei Kumiai) and borrowings from financial institutions.
A TMK(Tokutei Mokuteki Kaisha) is established in accordance with the Asset Liquidation Law to act as the holder of the assets to be invested. In this scheme, the purchase of real estate or trust beneficiary interests of the underlying real estate is funded by investorsf preferred shares and the issuance of specified bonds or specified purpose borrowings from financial institutions.
REITs, established in accordance with laws that govern investment trust and investment corporations, own properties held for investment purposes. REITs are legally prohibited from hiring employees and their business activities have to be externally managed. We are entrusted with the authority pertaining to asset investment. We make investments in real estate and real estate trust beneficiary interests using the capital of investors and borrowings from financial institutions.
Notes:
1. Custody of important assets including REITs-related pass books or contract documents and cash management is entrusted to a trust bank.
2. Services including the arrangement of an investor meeting, management of a name list of investors, accounting and tax matters are entrusted to a trust bank, tax accountant corporation, and others.