Asian alternative investment manager Pacific Alliance Group has agreed to invest up to $46 million in convertible bonds issued by real estate investment manager Secured Capital Japan.

The two companies also plan to co-invest an undisclosed but "substantial" sum in real estate and distressed debt opportunities in Japan and Greater China.

Tokyo-based Secured Capital Japan was founded in 1997 and now has $5.7 billion under management across seven real estate funds, targeting core-plus, mezzanine, and opportunistic real estate. The group is engaged in two key businesses: asset management relating to property investments; and the acquisition and servicing of loans, which in most cases, are secured by real estate.

Pacific Alliance operates out of five offices across China. It was founded in 2002 by Horst Geicke and Chris Gradel. It specialises in private equity, distressed debt and real estate. The firm has $4 billion under management across six primary funds. The firm's Pacific Alliance Asia Opportunity Fund is a closed-end fund that listed on the London Stock Exchange's AIM in September 2006. It tries to seek out value, arbitrage and special situation investments in Greater China and emerging Asia.