Mitsui & Co. has established a brokerage subsidiary to cater to institutional investors seeking to invest in alternative financial instruments in addition to stocks and bonds, the major trading house said Monday.

Capitalized at 480 million yen, Tokyo-based Japan Alternative Investment Co. will begin operating later this month. It will specialize in overseas hedge funds and private equity funds that invest in unlisted stocks, Mitsui said.

The company said it created the firm because of growing moves among institutional investors to diversify their portfolios due to the stock market slump and the Bank of Japan’s long-standing ultra-easy monetary policy.

The alternative investment market was estimated at 1.6 trillion yen at the end of 2001, Mitsui said.

The subsidiary will not conduct general stock brokerage operations, as Mitsui said such transactions entail high labor and systems costs.

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