Nomura Asset Management is seeking to capitalise on growing global investor interest in Japanese equities and bonds as stronger stock-market performance and higher domestic yields make the country's financial assets more attractive.
Nomura Holdings ' asset management arm is using renewed attention on Japan to expand its customer base and strengthen its international operations, Chief Executive Shoichi Ohkoshi said in an interview with Reuters.
Global investors had remained significantly underweight Japan during the country's prolonged period of economic stagnation and deflation, but that positioning is beginning to change. Nomura Asset Management believes investors are moving toward neutral allocations to Japan and could eventually increase their exposure further.
Japanese equities have benefited from stronger corporate earnings, governance reforms and renewed investor interest, while rising government bond yields have made Japanese fixed-income assets more appealing to international investors.
Nomura Asset Management, which manages about 156 trillion yen ($985.47 billion), is Japan's largest investment manager. The company is seeking to leverage its established position in Japanese and Asian equities while expanding its presence in global equity products.
A key part of that strategy is Nomura's acquisition last year of Macquarie's US and European public asset management businesses. Reuters reported that the deal significantly expanded Nomura's overseas footprint and distribution network, giving the Japanese group access to markets where building scale organically can be difficult.
The acquisition is also expected to help Nomura expand its global equity asset management business. The company sees an opportunity to become a more significant player in managing international equities, an area where Japanese asset managers have historically had a limited presence.
Japan's fixed-income market is another area of opportunity. Government bond yields have risen as the Bank of Japan has moved away from its long-standing ultra-loose monetary policy, making Japanese sovereign debt more relevant to international asset allocators.
Nomura sees the rise in yields as creating an opportunity to increase the visibility of Japanese government bonds among global investors, even though yields remain relatively low compared with those in several other major markets.
Nomura is also looking to benefit from increasing demand for corporate credit in Japan. Companies that historically relied heavily on bank financing are increasingly seeking funding through broader capital markets, creating opportunities for asset managers to develop and distribute corporate credit products.
The shift could provide Nomura Asset Management with another avenue to deepen its fixed-income business while helping global investors gain greater exposure to Japan's expanding corporate bond market.
Nomura did not provide details on its expectations for new asset inflows or customer growth. However, the renewed international focus on Japanese markets, combined with its expanded overseas distribution network, allows the asset manager to strengthen its position both domestically and globally.