Following Japan Prime Minister Fumio Kishida’s announcement of his vision for a more vibrant asset management industry, investors are likely evaluating the strength of the Japanese economy as they consider future plans. We have identified some trends and opportunities in Japan’s asset management industry.
Things to Watch
While outsourcing investment and middle-back operations is common in the EU, asset managers in Japan are required to keep investment operations in-house. Japan’s FSA task force is discussing a change to this requirement.
The FSA task force is considering creating an Emerging Managers Program (EMP) to assist new entrants and allow overseas asset owners, such as banks and insurance companies, to have investments with emerging managers.
Currently, compliance and registration create a burden for many asset managers, as each asset manager needs to be registered. The FSA task force is considering a less strict overseas model.
Japan is establishing special business zones for overseas managers to complete administrative processes in English.
The barrier to entry is currently very high for new asset managers, presenting a challenge for the Kishida administration’s vision. Japan’s FSA is taking steps to lower that barrier to entry and attract more business to the asset management industry in Japan. The FSA’s plans would allow new entrants to outsource their middle-back office team, tap into expertise and differentiate themselves from other existing asset managers.