Asia’s second largest hedge fund, Sparx Group Co., is to start a fund that will invest in hotel construction following Japan’s devastating ear
Asia’s second largest hedge fund, Sparx Group Co., is to start a fund that will invest in hotel construction following Japan’s devastating earthquake this March reported Bloomberg this week. Sparx CEO Shuhei Abe said that the firm was partnering with Tokyo property firm Kachikaihatsu Co. to build its first hotel in Natori City, northeast of Tokyo after raising USD14million for the project. This is an obvious indication of how Sparx plans on expanding its business, looking for credit yield beyond the realm of stock markets in a bid to resume dividend payments to investors this year. Abe said that there was a clear gap in supply and demand in the area following the destruction the earthquake inflicted. He said it was an opportunity to “participate in Japan’s reconstruction effort while securing decent returns”. Abe said that Sparx and Kachikaihatsu formed an SPV to issue senior and mezzanine bonds to investors who will receive at least a 6 per cent yield through hotel revenue. “In a world like today, what investors are looking for is a steady cash yield,” said Abe. The fund will last for six years and the hotel itself is due to open in April. A second hotel fund is expected to launch in early 2012 confirmed Abe.
