Policies on Customer-Oriented Business Conduct
Mitsui Fudosan Accommodations Fund Management Co., Ltd. (the Company) stipulates the following policies given the Financial Services Agency's announcement of Principles for Customer-Oriented Business Conduct on March 30, 2017.
1．Development and Publication of Policies on Customer-Oriented Business Conduct
The Company shall develop and publish policies for realizing business conduct oriented for Nippon Accommodations Fund (NAF) and unitholders (collectively referred to as Customers) and periodically disclose the implementation status.
2．Pursuit of Customers' Best Interests
The Company shall maintain highly qualified expertise and professional ethics and treat NAF faithfully and fairly in pursuit of Customers' best interests. In addition, the Company shall make efforts to ensure such business conduct becomes established as a corporate culture.
The Company will strive to steadily and continuously acquire accommodation assets owned and developed by the Mitsui Fudosan Group through NAF. By utilizing the Group’s information network and the Company’s own information-gathering channels, it will also acquire highly competitive quality properties from outside the Group, aiming for stable external growth.
The core of NAF’s investment strategy is to solidify its earnings base through continuous acquisition and stable management of rental housing. In addition, as a complementary investment target to rental housing, it will invest a certain amount in “hospitality facilities,” a recently growing and maturing market. Furthermore, by way of sophisticated, specialized asset management, the Company will seek improvement of unitholder value on a mid- to long-term basis, i.e., the stable growth of DPU (distributions per unit) on a mid- to long-term basis as well as an increase of NAV (net asset value) per unit.
3．Appropriate Management of Conflicts of Interest
The Company shall accurately identify the possibility of conflicts of interest arising with Customers and appropriately manage them in the possible event of such, in line with laws, regulations, internal rules and such.
The Company has established the following standards and procedures for transactions with sponsor-related parties in order to contribute to NAF unitholder interests by eliminating conflicts of interest and thereby ensuring appropriate asset management for NAF.
4．Clarification of Fees and Expenses
The Company shall provide information in a manner understandable by Customers on the details of management fees that NAF pays to the Company to which asset management is entrusted, as well as what services correspond to each of such fees.
In accordance with the provisions of the Articles of Incorporation, the asset management fees that the Company receives from NAF consist of five items: 1) Management Fee 1, which is based on real estate rental income; 2) Management Fee 2, which is based on pre-tax net income; 3) Management Fee 3, which is upon acquisition; 4) Management Fee 4, which is upon sale; and 5) Management Fee 5, which is for a merger with another investment corporation, whether by consolidation or absorption.
5．Easily Understandable Provision of Important Information
The Company shall disclose information according to laws and regulations from the viewpoint of ensuring transparency. In addition, the Company shall disclose information that the Company deems necessary and appropriate for unitholders' judgment in a timely and easy-to-understand manner.
The Company has established Disclosure Rules to develop a system for prompt, accurate, fair, investor-centric disclosure of information concerning the Company and NAF.
In addition to posting timely disclosure information on NAF's website, the Company strives to update financial and portfolio-related information in a timely manner, for example publishing month-end occupancy rate data within one week, to ensure that the information on NAF is up to date. Furthermore, all disclosed materials, including financial statements, annual reports (in English), analyst meeting materials, asset management reports and securities reports, are available to view.
6．Provision of Services Suited to Customers
The Company shall strive to understand the opinions and needs of unitholders through IR activities. Furthermore, the Company shall implement asset management with an aim to secure stable long-term earnings primarily through investment in high-quality rental apartments while paying attention to needs, etc.
7．Framework for Motivating Employees Appropriately and Other Measures
The Company shall develop a framework for motivating employees appropriately and an appropriate governance system to thoroughly promote actions for pursuing Customers' best interests and the appropriate management of conflicts of interest.
The Company implements the following initiatives to develop personnel with high levels of expertise, broad knowledge and ethical standards and ensure the health and safety of its employees.
1．Pursuit of Customers' Best Interests
By way of sophisticated, specialized asset management, the Company seeks improvement of unitholder value on a mid- to long-term basis, i.e., the stable growth of DPU (distributions per unit) on a mid- to long-term basis as well as an increase of NAV (net asset value) per unit.
2．Appropriate Management of Conflicts of Interest
The Company uses the value chain of the Mitsui Fudosan Group for asset management. On the other hand, there is concern that conflicts of interest may arise between customers and the Company and its related parties. Therefore, in addition to complying with laws and regulations, in order to prevent transactions that are not fair and impartial, the Company has established internal rules and an organizational structure.
3．Clarification of Fees and Expenses
The Company displays clearly the system of management fees it receives from NAF and discloses the amount of management fees paid each fiscal period.
4． Easily Understandable Provision of Important Information
In addition to disclosing information in accordance with laws and regulations from the viewpoint of ensuring transparency, the Company discloses in a timely and easy-to-understand manner the following information deemed necessary and appropriate for unitholder's investment decisions.
≫ Conduct briefing sessions for analysts and institutional investors
≫ Content posting for individual unitholders on NAF's website
5．Provision of Services Suited to Customers
While conscious of the opinions and needs of unitholders understood through IR activities such as those listed below, the Company implements asset management with the goal of securing long-term and stable earnings primarily through investment in high-quality rental apartments.
≫ Implementation of IR meetings for institutional investors both in Japan and overseas
≫ Implementation of briefing sessions for individual unitholders
≫ Participation in seminars for individual unitholders organized by industry organizations
6．Framework for Motivating Employees Appropriately and Other Measures
The Company focuses on nurturing its professional personnel to implement high-quality fund management
on an ongoing basis. Employees are encouraged to acquire various certifications so that their
expertise can be improved as professional personnel. Specifically, employees are given support in
their training and examinations for acquiring and maintaining expert qualifications and are assisted
in obtaining a wide range of knowledge and skills that are required for their work.
Through the implementation of training on compliance, ESG and such on an ongoing basis, the Company aims to spread awareness of its Customer-oriented business conduct among its employees.
The Company will also evaluate compliance in the performance rating of employees.