NOMURA REAL ESTATE MASTER FUND, INC.

TSE code :3462

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Governance

Governance of the Investment Corporation

Governance of NMF
The organization of the Investment Corporation consists of the General Meeting of Unitholders which is composed of unitholders, one Executive Director, three Supervisory Directors, the Board of Directors* whose members include Executive Directors and Supervisory Directors, and an Independent Auditor. The Investment Corporation’s Independent Auditor is Ernst & Young ShinNihon LLC.
* Based on the Act on Investment Trusts and Investment Corporations and the Investment Corporation’s Articles of Incorporation, the number of supervisory directors must be the number of executive directors plus 1 or more.
* Although NMF has a Board of Directors comprised of an executive director and supervisory directors, it is required that operations are outsourced as the use of employees is prohibited under law.

For details on the above organization, see the latest Securities Report, “Part 1. Fund Information / Section 1. Status of the Fund / 1. Overview of the Investment Corporation / (4) Structure of the Fund”. Only available in Japanese.

Executive Director and Supervisory Directors
Title Name Reasons for election Attendance at Board of
Directors meetings
(FY2018)
Executive
Director
Shuhei
Yoshida
Mr. Yoshida was the Supervisory Director of the former Nomura Real Estate Master Fund, Inc. and NMF, and is an attorney. As such, he is an expert in the ITA and related laws and regulations, specializing in the newest laws and regulations for real estate, particularly land and building leases, fixed-term land lease holdings, fixed-term house rentals, and lifetime leases. Upon considering his abundant experience, Mr. Yoshida was selected as Executive Director as it was determined that he has sufficient knowledge and experience for the position and to exercise his right to represent NMF. 92%
(12 times/ 13 times)
Supervisory
Director
Mineo
Uchiyama
As a certified public accountant, Mr. Uchiyama is well versed in accounting and tax matters. He also has experience auditing the accounts of companies listed on the Tokyo Stock Exchange, and has supervised the Executive Director’s tasks as a Supervisory Director for NMF. Mr. Uchiyama was selected as a Supervisory Director as it was determined that he has sufficient knowledge and experience to conduct the work required as a member of the Board of Directors for NMF. 100%
(13 times/ 13 times)
Supervisory
Director
Koichi
Owada
As a real estate auditor, Mr. Owada possesses vast insight regarding the fairness and transparency of real estate transactions. He has also had experience as Director, etc., at multiple corporations and has supervised the Executive Director’s tasks as a Supervisory Director for NMF. Mr. Owada was selected as a Supervisory Director as it was determined that he has sufficient knowledge and experience to conduct the work required as a member of the Board of Directors for NMF. 100%
(13 times/ 13 times)
Supervisory
Director
Mika
Okada
(Note)
As a lawyer, Ms. Okada is well versed in various related laws and regulations including real estate transactions. She was selected as a Supervisory Director as it was determined that she has sufficient knowledge and experience to supervise the Executive Director’s tasks as a Supervisory Director for NMF and to conduct the work required as a member of the Board of Directors for NMF.
(Note) Concerning Ms. Okada, the name described above is the former and professional name, but the name on the family register is Mika Furusawa. In addition, her term of office has started from June 1, 2019, therefore, she has not attended the Board of Directors meetings held in the most recent fiscal period.
Administration Fees, etc.
Administration fees the Investment Corporation pays are as follows:
Title Name Total compensation amount (FY2018)
Executive Director Shuhei Yoshida 4,800 thousand yen
Supervisory Director Mineo Uchiyama 3,600 thousand yen
Supervisory Director Koichi Owada 3,600 thousand yen
Supervisory Director Mika Okada (Note)
(Note) As Ms. Okada's term of office has started from June 1, 2019, therefore, there is no compensation paid in the latest operating period.
Title Name Total compensation amount (FY2018)
Independent Auditor Ernst & Young ShinNihon
LLC
61,400 thousand yen
(Note1) Executive directors, supervisory directors or independent auditors (here and hereafter in this Article, referred to as the “Directors Etc.”) are liable for damages to NMF if they have neglected to perform their duties. However, if Directors, Etc., have performed their duties in good faith and without gross negligence, and when NMF finds it particularly necessary, taking into consideration the details of the facts that are the source of liability, the status of the execution of the duties of such Directors Etc., and other circumstances, NMF may, to the extent permitted by laws and regulations, by resolution of the Board of Directors, exempt such Directors Etc., from liability for damages under the Act on Investment Trusts and Investment Corporations and the Investment Corporation’s Articles of Incorporation.
(Note2) Of the remuneration paid to the Independent Auditor in the 7th fiscal period ended February 28, 2019, \3 million was for preparing a comfort letter and \7 million was for support services relating to ESG information disclosure improvement.
Fee structure Calculation method
Asset management feeⅠ(Total assets-linked) Total assets (*1) × 0.45%(annual basis)
Asset management fee II(Net income-linked) Net income (*2) × 5.5%
Acquisition fee Acquisition Price × 1.0%
Disposition fee Disposition Price × 1.0%
(*1) Excludes unamortized goodwill.
(*2) The amount obtained by adding goodwill amortization cost to Net Income before Deduction of Management Fee II and deducting gain on negative goodwill, after compensation of loss carried forward (if any).

For details on the above compensation for management and compensation for management, etc., of other asset custody companies, general administrative agents (administration, accounting), and administrator of the investors' registries, see the latest Securities Report, “Part 1. Fund Information / Section 1. Status of the Fund / 4. Commissions, etc., and Taxes.” Only available in Japanese.

Management Structure of NMF
NMF has appointed Nomura Real Estate Asset Management Co., Ltd. (NREAM), to perform all asset management services for NMF. NREAM manages NMF’s assets in accordance with the Asset Management Agreement conducted between NMF and NREAM.
NREAM is entrusted with the management of assets of multiple investment corporations including NMF and other real estate funds in addition to offering advice on investments.

<Overview of Each Committee>

Name of Committee Overview
Investment Committee   ● A Committee that deliberates on investment decisions.
This committee is charged with the deliberation of Nomura Master Fund’s policies governing important matters. Specifically, it discusses the fund’s basic policies for asset management and investment advisory activities along with its asset administration policies and finances. Thus, the committee acts as a decision-making body for the Asset Management Company.
Constituents Chair:President and Executive Officer
Members:Chief Strategy Officer, other Executive Officers (Note) and Compliance Officer
(Note) Excluding Head of Fund or Head of each department of NMF Investment Management Group and part-time Executive Officer
Frequency of meetings As a basic rule, the chair calls a meeting once a week.
However, a meeting can be held immediately if needed.
Compliance Committee   ●A committee that deliberates and makes decisions regarding compliance.
In addition to monitoring the status of legal compliance, this committee works to avoid conflicts of interest. To this end, it deliberates on and gives approval for specific transactions as internally defined by the Rules Concerning Transactions with Related Parties.
Constituents Chair:Compliance Officer
Members:outside experts appointed by the chair (Note)
(Note) One lawyer and one professor in graduate school are currently appointed.
Frequency of meetings As a basic rule, the chair calls a meeting once every three months.
However, a meeting can be held immediately if needed.
Risk Management Committee   ●A committee that establishes the risk management structure and regulations and monitors risk.
Addressing various risks arising from the Asset Management Company’s operations, this committee deliberates on risk management focusing discussions on the formulation, amendment and abolishment of related organizational structures and in-house rules. It is also charged with monitoring asset management risk.
Constituents Chair:Executive Officer in charge of the Legal & Compliance Department
Members:A supervisor of the Legal & Compliance Department (another executive officer), the Compliance Officer, and the general managers of the Corporate Planning, Client Relations & Marketing, Investment Management Planning Department, Acquisition, Finance & Accounting, and International Business Planning departments, and outside experts separately appointed by the chair.
Frequency of meetings The chair calls a meeting at least once every three months.
However, a meeting can be held immediately if needed.
Project Screening Committee   ●A committee that prevents conflicts of interest between operated funds prior to their occurrence
In order to secure appropriate handling of information where investments overlap between funds, etc., and to prevent conflicts of interest between funds, etc., prior to their occurrence, the Asset Management Company obtains information on a candidate property, the Compliance Officer convenes a committee meeting aimed at determining which subsidiary would take precedence over its counterparts in negotiations for the particular property acquisition.
Constituents General manager of the Acquisition Department, managers of business units operating under that department, and the fund managers of each operating funds.
For details regarding the management structure of the asset management company, see the Securities Report’s “Part 2. Detailed Information of the Investment Corporation / Section 4. Status of Related Corporations / 1. Conditions of the Asset Management Company.” Only available in Japanese.
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