Asset Management One plans to spend as much as ¥5 billion on people over the coming three years, an increase of about 30% versus the previous three-year span. The investment targets hiring advisers who can guide overall asset allocation and alternative strategies, and boosting compensation for portfolio managers. Professionals who can evaluate entire portfolios and recommend the best mix are "extremely important," President Noriyuki Sugihara said in an Oct. 1 interview. "We need to understand clients' investment objectives and deliver proposals that are appropriate for them," he added, citing schools, pension funds, and retail investors.
After decades of ultra-low rates, Japan's home market suddenly offers more yield to work with. In late September, Japan's 10-year government bond yield momentarily rose above 3.1%, and this month it is still close to a near three-decade high, expanding the space for opportunities in domestic fixed income. Meanwhile, rising prices are pushing pension funds and university endowments to seek higher returns. Individuals now have more avenues as well, with the tax-exempt NISA accounts expanding and government bonds sold to retail investors offering richer yields.
Rising rates change what asset managers can charge and who they need to hire. Market Briefs covers the industry free every morning.
Last year, the company created a portfolio solutions department to provide broader, cross-asset guidance to corporate pension plans and university endowments. It started with foreign equities and plans to add coverage of overseas bonds and alternative investments. Asset Management One is also growing its alternatives business as Japanese investors look beyond traditional stocks and bonds. It wholly owns an investment management subsidiary focused on strategies such as hedge funds and private equity, and staffing there has increased by about 40% over roughly four years to 67.
Along with acting as a gatekeeper that works with overseas managers to bring their products to Japanese investors, the firm is developing its own capabilities. Assets in infrastructure related funds managed in house have surpassed about ¥100 billion. "For areas where we have a path to winning, we will continue to explore the potential of the in-house business," Sugihara said.
For anyone allocating to Japan, the menu is already changing. Higher local yields have made more fixed income options viable at home, the NISA expansion has widened tax efficient choices for individuals, and managers like Asset Management One are adding cross asset advice and more alternative strategies alongside their gatekeeper role with global partners. That combination means more ways to build a portfolio in Japan today, with firms investing in people and products to meet a broader set of goals.
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