A Japanese lender controlled by private equity firm Cerberus Capital Management is having difficulty with another part of the alternative investment world.

Aozora Bank blamed its hedge fund investments in part for its plummeting fiscal first-quarter profit. The firm said today that net income fell to ¥9.33 billion (US$86.6 million), down 75% from the ¥37 billion it made a year earlier. A decline in fees collected was also noted as a cause of the shrinking profit.

Cerberus earlier this month struck a deal to pay as much as US$416 million to raise its stake in Aozora to 46%.