Japan to woo foreign assset managers

Japan seeks higher investment returns, launches new plan to woo foreign asset managers

Latest plans and steps by Japanese authorities to lure more foreign asset managers is expected to broaden the range of investment products and increase returns on over $18 trillion in household assets, most of which are currently held as cash or parking at banks as savings earning near-zero yield.

The world’s third-largest economy proposed tax breaks, visa rule changes and English-language services as some of the newest strategies to lure “highly skilled” asset managers from overseas who hopefully will help develop new products “that do not exist in the current market,” Hiroshi Okada, director of Financial Services Agency’s strategy development division, said in February.

This move to recruit foreign talents is part of Prime Minister Yoshihide Suga’s plans to strengthen Japan’s position as “an international financial center for Asia and for the world.”

“Foreign fund managers are expected to change Japanese individuals’ risk-averse investments by diversifying their assets as Japanese fund managers have tended to hesitate to do so, relying on an easier sale of bonds and stocks at home” than other products such as alternative assets, remarked Makoto Kikuchi, CEO of Myojo Asset Management.

Foreign fund managers are expected to change Japanese individuals’ risk-averse investments

Makoto Kikuchi, CEO Myojo Asset Management

Japan is not the only nation currently promoting alternative investments, with hopes of drumming up investment returns, as interest rates stay stuck at critically low levels. According to PwC, global alternative assets under management are estimated to rise more than 50% to $21.1 trillion by 2025 from $13.9 trillion in 2020, with private equity as the primary growth driver.