Mitsui & Co. Digital and Mitsui Sumitomo Trust jointly established a new company specializing in digital securities called "Alterna Trust" | CoinDesk JAPAN

Mitsui & Co. Digital Asset Management (MDM) and Sumitomo Mitsui Trust Bank announced on July 2 that they have jointly established a new company, "Alterna Trust Co., Ltd.", specializing in digital securities (security tokens, hereinafter referred to as ST).

The new company aims to merge the digital technologies such as AI held by MDM with the expertise in trust operations possessed by Sumitomo Mitsui Trust Bank, to streamline the composition process of ST and contribute to the development of the digital securities market.

The Alternative Trust specializes in the role of "trustee" in the issuance scheme of ST, where it receives the underlying assets and issues beneficiary securities. Specifically, it accepts alternative assets such as real estate acquired and managed by asset management companies like MDM as trust property, and issues beneficiary securities backed by those rights. In the flow of this process, securities firms compose ST based on these beneficiary securities and sell them to investors, playing a central role.

[リリースから]The background for the establishment of the new company is the challenge of streamlining the ST formation process. In the traditional trust structure, it can take up to a year to form a single product.

At Alterna Trust, we aim to shorten this process to about 1 to 2 months by utilizing AI technology and other means. This will allow us to provide investment opportunities in real estate and similar assets, which have primarily been available to institutional investors, more quickly and broadly to individual investors.

[MDM説明資料から]The MDM leading this initiative has been operating in the ST market through the asset management platform "ALTERNA" for individual investors since its establishment in 2020. Since the formation of its first fund in December 2021, it has provided a total of 17 funds, the most in Japan, combining its own services and those through external securities companies, with total assets under management exceeding 200 billion yen.

[MDM説明資料から] The materials released by MDM also introduce voices from investors who actually use "ALTERNA".

Users have commented that, "Since I can imagine the actual assets as 'a hotel in Asakusa' and 'an apartment in Nihonbashi', it's easy to understand what I am investing in," highlighting the specificity of ST's underlying assets. Additionally, there are voices noting that "not having to worry about daily price fluctuations is a significant advantage," regarding price stability compared to stocks.

Related article: "Investing close to 100 million yen alone" Digital securitization of apartments and hotels in Asakusa and Kyoto, a new option for individual investors proposed by Alterna.

The capital of the new company is 665 million yen (including capital reserve), with the investment ratio being 85.1% for MDM and 14.9% for Sumitomo Mitsui Trust Bank. Both companies have also entered into a business partnership to collaborate on joint management of Alternative Trust, mutual dispatch of specialized personnel, consideration of ST transformation of assets held by Sumitomo Mitsui Trust Bank, and provision of financing.

As part of its future business plan, Alternative Trust is assuming a formation of ST worth 100 billion yen in the first year, aiming for a cumulative trust balance of 1 trillion yen in five years. Initially, it will focus on real estate assets, but in the future, it is also considering expanding into a more diverse range of asset classes, including corporate bonds and monetary claims held by Sumitomo Mitsui Trust Bank.

[MDM説明資料から]In a media briefing on June 30, MDM President Takashi Ueno explained the background of this partnership. He revealed that this framework was proposed by MDM, stating that "it took courage to suggest to SMTB (Sumitomo Mitsui Trust Bank), whose main business is trust services, to carve out a part of it."