Pacific Alliance Group targets distress with Secured Capital Japan

Pacific Alliance Group is to purchase $46 million in convertible bonds from Secured Capital Japan, as well as forming a strategic alliance with the Tokyo-based investment manager to purchase assets and distressed debt in Japan and China.

Pacific Alliance Group, the Asian alternative investment firm, is to invest up to ¥4.5 billion ($46million; €35 million) in convertible bonds issued by Secured Capital Japan as part of a strategic partnership aimed at investing in Japan and China.

In a statement issued by Pacific Alliance, the Hong Kong-based firm, founded in 2002 by Horst Geicke and Chris Gradel, said it had made an initial payment of ¥3 billion for the convertible bonds.

The two firms have agreed to co-invest “in prudent real estate opportunities and distressed debt over the next several years in Japan and Greater China.”

The strategy will involve the two investment managers exploring deals separately but investing jointly.

Pacific Alliance Group has around $4 billion in assets under management. The Group has more than 120 staff across offices including Shanghai, Beijing, Hong Kong, Hangzhou and Tianjin.

Secured Capital Japan is a Tokyo-based real estate investment management firm with approximately $5.7 billion of assets under management as of the end of December 2008.