Secured Capital Japan is planning a final equity close of up to $750 million for its fourth Japanese opportunity fund as it plans to take advantage of real estate distressed debt opportunities across the country.
The Tokyo-based fund manager closed on approximately $500 million of equity at the end of 2008 but expects to hold the final close of its SCJREP IV fund within two months.
Secured Capital’s president and representative director, J-P Toppino said there was a short term investment window in the Japanese distressed debt market for a limited number of equity rich investment houses to take advantage.
He said the fund would invest up to 35 percent of its equity into the sector. The remaining 65 percent would be focused on direct real estate investments.
He said: “Our investors are excited about the distress leading to opportunities in Japan. There is a lack of competition – it’s hard to come up with even five companies with more than $300 million to invest in debt.”
Toppino said: “I think right now property in Japan is at attractive prices, but given the fact that rents are declining, not falling off the cliff, but certainly declining and vacancies are going up, this is making debt a more attractive play at least in the short term.”
The SCJREP IV fund, which has an eight year lifespan and is targeting an internal rate of return of approximately 20 percent, is about 10 percent committed to deals to date. Investors in the vehicle include US pension funds and university foundations.
Secured Capital was founded in 1997. The listed firm, which manages approximately $5.7 billion in assets across seven funds, has a market capitalization of $70.2 million.