TOKYO (Reuters) - Japan’s Sumitomo Mitsui Asset Management wants to more than double its $131 billion assets under management by 2020 and is looking at acquisitions to help it grow, its chief executive told Reuters.
Encouraged by signs of economic recovery and a potential shift by Japan’s main pension fund to put more money in riskier assets, the company is aiming to overtake industry leader Nomura Asset Management which held 31.5 trillion yen ($308 billion) in assets as of March.
“We want to become the top Japanese asset manager in asset size as well as the quality of our products by 2020. We are now crafting our three year plan as the base to achieve that goal,” CEO Kunio Yokoyama said in an interview.
He added that the company was open to both domestic and foreign acquisitions, and was also ambitious in its goals for organic growth.
There are few reliable rankings for Japanese asset firms but Sumitomo Mitsui is regarded as ranking among the top 10.
Prodded by Prime Minister Shinzo Abe, who has lifted the economy with bold monetary easing and hefty fiscal spending, Japan’s $1.26 trillion Government Pension Investment Fund (GPIF) is currently studying whether it should lower its substantial domestic bond allocation and shift into other assets.
The likely allocation change by GPIF could also prompt private pension funds and other institutional investors to move more of their money into stocks and other risk assets, and Yokoyama also hopes that retail investors would follow suit.
Japanese individual investors hold some 1,600 trillion yen in savings with more than half parked in low-yielding bank and postal deposits.
To attract retail investors, Sumitomo Mitsui aims to expand its offerings of Japanese equities mutual funds and global multi-asset funds although it will avoid sophisticated products like currency-linked double-decker funds.
“I feel retail money could finally move. A one percent shift to investments by households would create a flow worth 16 trillion yen,” Yokoyama said.
($1 = 102.1200 Japanese Yen)
Writing by Chikafumi Hodo; Editing by Edwina Gibbs