Did you know that the Japan's personal financial assets amount to JPY1,400 trillion (about GBP10 trillion), of which over half currently sits in bank or postal saving accounts with a tiny return?
In addition, Japan has a rapidly ageing population and it is estimated that two members of the working population will be supporting one retiree in 2020.
During the recent bankruptcy of Japan Airlines, its management persuaded retirees to agree to a reduction in their pension entitlement. This started people worrying about their future pension entitlement.
So there are many reasons for individuals or pension funds to think hard how their money might generate a healthy return. There may be significant opportunities for UK asset management in the Japanese market.
UKTI Tokyo ran a seminar on UK asset management at the Ambassador's Residence on 27 May. Five British asset managers presented to an audience of over 120 Japanese guests, consisting of Japanese asset managers and institutional investors.
The event was opened by the Lord Mayor of the City of London, Alderman Nick Anstee (pictured above). JO Hambro Capital Management presented on strategies in equity investments. Charlemagne Capital spoke about emerging market equities. We then had speakers talking about 'alternative investments'. Martin Currie reflected on the growth of the hedge fund industry and where it could be heading from now on. Investec Asset Management spoke about the commodity markets and Aegon Asset Management spoke about global property investments.
There are already many fund managers, both Japanese and foreign, who offer a broad range of products to Japanese investors. However, some people from the audience commented that the more exotic the product, the harder it becomes to choose the right investment vehicle and that is when they need an external asset manager with a specific area of knowledge. We hope that UK companies will be able to offer their expertise.
As a result of the interest this event attracted, I am considering a follow up. Please feel free to contact me if you have any comments or suggestions at services.japan@fco.gov.uk.
Naomi Takegoshi