[TOKYO] Nomura Holdings’ chief executive officer sees more scope to get business from Japanese investors who are looking to private markets as a way to diversify their assets.
“Compared with the share of private assets in portfolios overseas, Japan’s exposure is still quite low,” CEO Kentaro Okuda said in an interview broadcast on TV Tokyo on Thursday (Oct 23). “That means there’s still room to include private products to enhance performance and stabilise returns. We see significant potential in this area and intend to pursue it actively.”
Okuda has spearheaded a push by Nomura into private markets, partly to complement its traditional business selling stocks and bonds to retail investors. The firm’s alternative assets under management, including private investments, climbed 25 per cent in the past year to 2.7 trillion yen (S$23 billion) as at June.
Global investment firms are increasingly trying to tap the wealth of Japanese households, which have more than US$14 trillion in financial assets – about half of which is in cash. Steve Schwarzman, CEO of Blackstone, the world’s biggest alternative asset manager, told an audience in Tokyo this week that he sees momentum in the government’s efforts to expand opportunities for local investors.
Asked about recent concerns in private credit markets following the bankruptcy of two US auto-related companies, Okuda said it’s true that unlisted products provide less publicly available information than listed ones.
“That is precisely why we take care to thoroughly explain each product’s characteristics and risks” to clients, he said in the television interview.
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Nomura had about US$8.9 million of credit exposure related to First Brands Group, the US auto parts maker that filed for bankruptcy in September, the Nikkei newspaper reported last week.
Okuda also said that Nomura’s pipeline for advising on mergers and acquisitions is growing fast as more Japanese companies seek to boost efficiency.
“Our own pipeline is expanding rapidly, including cross-border investments,” he said on the TV programme. “We expect this strong activity among Japanese companies to persist going forward.”
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Nomura is the top adviser on Japan-related M&A deals so far this year, followed by Goldman Sachs and Morgan Stanley, according to data compiled by Bloomberg. Japan’s biggest brokerage is scheduled to report quarterly results next Tuesday. BLOOMBERG
