Policy on Product Governance
【Policy on Product Governance 】Business situation in 2024
【 Supplemental Principle 1. Basic Policy 】
The Company’s main Products and Services are private REITs and real estate Private Funds. Both are the Products and Services using real estates as backing assets for which the Company can maximize its knowledge, experiences, and wide-ranging expertise in real estate and finance.
Based on the Basic Policy, the Company only provides the private REITs as Products and services to qualified institutional investors so that it can secure stable profit and growth of invested assets to maximize its Customers’ returns.
On the other hand, the real estate Private Funds are the Products and Services mainly for professional investors. Every fund has distinct characteristics, and the Company share adequate information with the Customers so that they can make correct decisions for investments.
【 Supplemental Principle 2. Formation of Product Governance Framework 】
The Company has established the rules for providing and recommending the Products and Services to its Customers. The Company's officers and employees perform their tasks following these rules so that all business processes are performed at a constant quality level.
Note 1 : The rules related to the business processes include the following:
- Organization Rules, Division of Duties Rules, Administrative Authority Rules, Decision-making Standards Rules
- Committee Rules, Risk Management Rules, Internal Audit Rules
- Compliance Rules, Compliance Manuals, Rules on Transactions between Interested Parties
- Due Diligence Appraisal Meeting Rules, Property Related Assets Information Distribution Rules
- Operational Manual (for Acquisition), Operational Manual (for Management), Operational Manual (for Disposition)
In FY2024, the Company held 9 Legal Compliance and Risk Management Committee meetings and 37 Investment Committee meetings to make discussions and decisions, involving external experts. Additionally, we performed an annual internal audit to verify that the effectiveness of quality control has been ensured.
Note 2 : For the issues pointed out by the internal audit, the Company revised the business processes and rules as necessary to maintain the quality of the Products and Services and to ensure the effectiveness of the product governance.
【 Supplemental Principle 3. Actions in the Configuration of Financial Products 】
To provide the Products and Services suitable for the Customers, the Company is committed to having close communication with them from the configuration process, understand their specific needs (type of property, capitalization rate, scale of investment, and management period), and design the products and services to meet their needs.
Note 1 : The Configurator analyzes the value of the real estate to be the backing assets and designs the Products and Services to meet the Customer’s needs (including balances between risks, returns and costs) based on the information which the Sales Representative obtained from the Customer, as per the following internal rules:
- Decision-making Standards Rules
- Committee Rules
- Compliance Rules
- Due Diligence Appraisal Meeting Rules
- Operational Manual (for Acquisition)
Note 2 / Note 3 : As described above, the Configurator collaborates and shares the information as appropriate with the Sales Representative to understand the Customers’ asset situation, knowledge, needs, and transaction experiences and purpose, so that the Configurator can provide and recommend the Products and Services suitable for the Customers. Additionally, the Company checks and verifies whether those factors are incorporated in the Products and Services through internal meetings, such as LOI meeting, DD meeting, Legal Compliance and Risk Management Committee meeting, and Investment Committee meeting, and decision-making processes.
【 Supplemental Principle 4. Actions After Providing Financial Products 】
The Company performs the management control of individually managed Products and Services by developing the management control plans on a regular basis, having the plans discussed and decided by the Investment Committee, and obtaining consent from the stakeholders in the investment scheme such as lenders and trustees. When developing the management control plans, the Company is committed to maximizing the Customers’ returns by reviewing and improving the investment strategies as necessary based on the past performances.
The results of reviews and improvements are utilized as necessary for reviewing the product governance framework for other Products and Services.
Note 1 : For the regular reviews of management control plans described above, the Company verifies whether the core factors, such as income gains from the invested properties, repair cost including capital expenditure, and management control cost, are appropriate in consideration of the balances between the risks, returns, and costs, based on the characteristics of the Products and Services. If it is impossible to provide the originally planned added value, the Company will change its investment strategies to take actions such as early extinguishment and early disposition to maximize the Customers’ returns in accordance with the characteristics of the Products and Services.
Note 2 : After designing and configuring the Products and Services, they are basically managed within the Company, which enables the Administrator, Configurator, and Sales Representative to collaborate, share the information as necessary, and make prompt decisions even in situations requiring quick judgment.
Note 3 : Even in case that the management control task is outsourced, the Company can collaborate and share the information with the Management Outsourcee by taking measures like regular meetings.
【 Supplemental Principle 5. Provision of Intelligible Information to the Customers 】
The Company publishes the information about its management and product governance frameworks on the Company’s homepage to provide the Customers with intelligible information so that they can select better products for themselves.
URL:
https://www.marubeni-asset.com/en/business/index.html
Note 1 / Note 2 : The Company gives its investment managers and asset managers the opportunities to have close communications with the Customers and share the information directly about individual Products and Services. The Company also pays full attention to the information to share so that the information is intelligible and does not cause any doubt.
