Basic Policy for Customer-Oriented Business Conduct

We, as a financial instruments business operator, hereby adopt the “Principles for Customer-Oriented Business Conduct” which the Financial Services Agency laid down (as published on March 30, 2017 and modified on January 15, 2021). With respect to the relationship between those Principles and our own basic policy and status of commitment, please refer to the Correspondence Table with the Financial Services Agency’s “Principles for Customer-Oriented Business Conduct”.

We have mainly engaged in the business of the formation and management of private funds, and our customers are entities entrusting us with (1) the management of real estate and real estate beneficial interests in a trust in private funds or (2) provision of advice, etc. concerning management thereof or, if such entities are special purpose companies (“SPCs”), investors investing in such SPCs. Most of such entrusting parties (excluding SPCs) and investors into SPCs are qualified institutional investors (“tekikakukikan toushika”) or professional investors (“tokutei toushika”).

1: Establishment, Announcement, etc. of Basic Policy for Customer-Oriented Business Conduct We hereby establish and announce the policies for realization of the “Customer-Oriented Business Conduct”.
We will regularly review such polices for better business operation, and publish the results of review, together with the status thereof, on our website.
2: Pursuit of Customers’ Best Interest In order to realize its customers’ best interest including the maximization of investor interest, we will always endeavor to improve our activities as professionals of finance and real estate management, maintain a high degree of professional ethics worthy of customers’ trust, and carry out our duties fairly and faithfully with a view to providing good quality services to customers. We will ensure our stable customer base and profitability by appropriately motivating our employees and establishing our governance structure so that such business operation may take root as our corporate culture and through them pursuing customers’ best interest.
3: Appropriate Management of Conflicts of Interest It is our strong point that we can realize the customers’ best interest including the maximization of investor interest through active management strategies making good use of the network of the ORIX Group; provided, however, that when using the ORIX Group network, we will appropriately manage so that there will not occur the result that the interest of the ORIX Group and the interest of customers conflict with each other and the interest of customers may be improperly harmed. Specifically, under the Rules for Transactions among Interest Parties, with respect to transactions threatening to cause any conflict of interest such as transactions with a ORIX Group company, we will ensure the fairness of such transactions by beforehand examining the circumstances of transactions, appropriateness of terms and conditions thereof such as the amount to be paid, etc. and, for certain transactions, by going through the screening by a compliance committee with an external member (an external attorney) entitled to power of rejection.
4: Clarification of Fees, etc With respect to the management fees and investment advisory fees of our private funds, their compensation structure and amounts are determined on an individual basis in consideration of the type, size, location of the subject property, scheme composition, operation volume and other details of the tasks, etc. and through consultation with a customer concerned. The standard compensation structure is composed of the fee at entrustment, interim fees, fee at sale, fee at additional entrustment, fee at refinancing, and contingency fee for increase of sales price, and we will explain them, together with the detail of what services are covered by them, in a clearly understandable way, by incorporating such explanation in materials for customers’ consideration of investment, etc.
5: Provision of Important Information in an Easy-to-Understand Manner Before commencement of transactions with each customer, we will, in consideration of the customer’s knowledge, experience of investment, etc., provide the customer with important information objectively seeming to influence the customer’s judgement (details of investment, risks accompanying the investment, material indicators usually verified in the real estate investment, possibility of conflict of interest, etc.) so that the customer can adequately understand the transactions and, during the process of the transactions, we will be highly committed to transparent asset management and provide correct information. we do not sell, recommend, etc. any set of financial instruments and/or services as a package.
6: Provision of Services Suitable to Customers Based on grasping of customers’ purposes of investment and needs, we will, taking adequate account of the statuses of their property, knowledge and experience of investment, set up, provide, etc. opportunities for investment considered suitable to them. We do not sell, recommend, etc. any set of financial instruments and/or services as a package.
7: Framework for Motivation of Executives and Employees, etc. We regard compliance with social norms based on high ethical standards, as well as compliance with laws and regulations, as the utmost important issues in management. Under this principle, we have laid down the “Compliance Action Guidelines”, and have expressed in a message by top management to executives and employees that activities concerning the compliance including positive participation in compliance programs are incorporated in their performance evaluation and the criterion for their promotion to upper posts and have practiced it. In addition, we will endeavor to enhance our governance structure so as to urge the practice of the compliance and the “customer-oriented business conduct”.