Japan-based commercial lender Shinsei Bank has teamed up with Russell Investments Japan to market a private placement open-ended securities investment trust, known as Shinsei Russell Intelligent Government Bond Fund, to financial organizations in the country.
The investment trust, which will be managed by Russell, mainly invests in foreign sovereign debt and is part of Shinsei’s strategy to expand its private placement investment business.
The fund has JPY4bn ($451m) of assets under management and aims to invest mainly in non-Japanese sovereign and government bonds.
In order to minimize interest rate risk, the fund will invest for nearly five years and help to achieve higher yield compared to Japanese government bonds for the same period.
It has been designed considering financial institutions’ appetite for limited overall portfolio risk, and is expected that it will carry low risk weighting under regulatory capital rules.
Shinsei Bank offers numerous financial products to both individual and institutional customers and had $114.6bn of assets as of 30 September 2012.