The paper considers precoder design for the downlink of multi-user MIMO systems where antenna array are used at both the base station and the mobile receiver. The proposed precoder does not completely eliminate multi-user interference (MUI) as previous schemes with multiple receive antennas per user, but obtains an optimum compromise between noise enhancement and MUI mitigation. Furthermore, by extracting diversity from each user's subspace and reducing precoding loss, the proposed scheme can offer a significant gain in term of average bit error rate (BER).