Diamond Realty Management Inc., a unit of Japan's biggest trading house, aims to raise as much as ¥15 billion for a fund that provides loans for property acquisitions and refinancing in the country.
The unit of Mitsubishi Corp., which has ¥330 billion in assets under management, plans to complete the fundraising from institutional investors in Japan by the end of next March, said Naoshi Ogikubo, president and chief executive officer of Tokyo-based Diamond Realty. The fund will target annual return of about 6 percent, he said.
Diamond Realty is starting the fund to lure investors who are seeking safer and more stable investments following the recent market rout this month triggered by the U.S. credit downgrade and Europe's sovereign debt concerns. The fund invests in mezzanine loans, which typically bridge the gap between the senior-class mortgage and the buyer's equity, for real estate investors and owners seeking to refinance their assets.