No one can resist the enchantment of Tokyo. From the wacky and wonderful structures at Omotesando to the tasteful Senso-ji temple in Asakusa, Tokyo offers an exquisite blend of contemporary and traditional.
This is one of the reasons why Simone Song, founding partner of ORI Capital, a Hong Kong-based venture capital fund focused on healthcare technology, describes her company’s expansion into Tokyo as a “dream come true”.
Song is an unabashed fan of Japan and its capital, and loves everything about Japanese culture, from food to religion and art.
But it is not just these aspects that are luring ORI Capital to Tokyo. “From a funds perspective, the city fits perfectly into our focus area,” continues Song.
An Easy Expansion
Not only is Japan’s top-notch stem cell scientific research capabilities a draw for ORI Capital; Tokyo also has ample reservoirs of long-term institutional money.
For financial institutions seeking to raise assets in Japan, the opportunities are enormous. Japan has one of the largest pension funds in the world with combined assets worth approximately US$1.63 trillion. Moreover, in the prevailing low interest-rate environment, pension fund managers facing a rapidly aging population are increasingly looking at international markets for higher returns.
Logistically speaking, the expansion into Tokyo couldn’t have been easier with the free consulting services program offered by the Tokyo Metropolitan Government (TMG), says Song.
“The timing was just perfect. We were thinking about it and a few days later we heard about this program. TMG’s program provided a list of placement agencies to help us identify and talk to long-term investors,” she says. “Also, when it comes to connecting with the right lawyers, tax accountants or headhunters, they have that all ready.”
Based on its “Global Financial City: Tokyo” vision, TMG offers support to asset managers and fintech companies that are considering setting up a new base in Tokyo. This includes firms that want to stay in Tokyo for a short period of time to carry out preliminary research before deciding whether to take the plunge.
The support covers financial assistance to facilitate setting up an office. This includes an exemption of up to 300,000 yen per month to help cover rent for up to three months, applicable to regular offices, private-shared offices or co-working spaces. TMG also reduces the burden of using offices by exempting initial upfront costs, such as admission fees or security card fees with a limit of 200,000 yen.
“At such a stage of uncertainty worldwide, it was very useful to get the help for the office,” says UMEMURA Kiyohisa, Partner at UK payments consultancy RedCompass, which also received support from TMG when setting up their office in Tokyo. “As part of the consultation offered by the Business Development Center Tokyo, we also got support from tax accountants and administrative lawyers.”
RedCompass has many business reasons to expand into Tokyo, says Umemura.
“Firstly, the Asian market in general has room to grow,” he shares. “Secondly, because of the COVID-19 situation, we felt it was necessary for us to diversify our resources around the world. Tokyo has a very rich market of skilled talent and we want to eventually tap into that.”
Tokyo’s Charms
Chua Kee Lock, Chief Executive Officer of Vertex Holdings, the venture capital arm of Singapore sovereign wealth fund Temasek Holdings, also found TMG’s free consulting services program “extremely helpful” while establishing its office in Tokyo.
“Vertex’s unique network architecture is not very common in Japan,” says Chua, whose fund was an early investor into Southeast Asian ride-hailing and food delivery decacorn Grab. “Nonetheless, TMG was able to give us timely and relevant assistance and advice.”
Chua adds that a physical presence in Tokyo would be “beneficial for our portfolio companies, providing strategic diversification to our global investors and investment base.”
The world’s biggest city definitely has powerful appeal. Being the world’s largest city by GDP and an economic powerhouse, the city not only has an allure from a financial perspective but also a universe of cultural and culinary heritage to explore.
It is a city that has something for everyone. As Simone Song at ORI Capital might say, it is the stuff of dreams.
