Nomura Asset Management, Japan's largest money manager, is looking to expand into retail fund markets in Asia, its chief investment officer said on Wednesday, as it seeks to increase its overseas exposure to fuel growth.
Asian asset managers such as South Korea's Mirae Asset are increasingly looking beyond their borders for growth. Last month, Nomura announced it would take over the management of the Japan Fund in the United States, billed as the world's oldest fund focused on Japanese equities.
But once high-flying regional stock markets, such as India and China, have sharply reversed course this year, falling victim to a weakening global economy, a continued global credit crisis, and increasingly, the specter of inflation.
But Nomura Asset is banking on the long-term growth potential for the region, as a handful of other Asian asset managers also bet that they can translate expertise gathered in years of operating within their borders to markets abroad.
"We would like to go into the Asian retail market," Takahide Mizuno, CIO of the asset management unit of Nomura Holdings (8604.T: Quote, Profile, Research), told the Reuters Japan Investment Summit.
Mizuno noted the expansion into Asia would likely start in countries where it has already established offices, pointing to South Korea, Singapore, Hong Kong, and Malaysia as targets.
Nomura Asset aims to grow overseas on its own, but in China and India, the fund may seek joint ventures or other alliances, Mizuno said, citing them as examples of countries "with unique cultures and unique regulations."
Nomura Asset had 24.3 trillion yen ($229.2 billion) in assets under management as of March 31.
It had previously said it was aiming to raise that to 43 trillion yen by March 2011, with two-thirds of the growth to come from its domestic retail business and the rest from its institutional investor business, mainly from overseas.
TANKING MARKETS
After posting five consecutive years of double-digit growth, the MSCI index of Asian stocks outside Japan .MIAPJ0000PUS has dropped some 20 percent so far this year, and is down about 29 percent from a record hit on November 1 2007.
Though Mizuno predicted difficult short-term conditions, he sees long-term potential in markets such as India and Vietnam, citing their economic growth potential, and predicted they will soon again become darlings of foreign investors.
"At some point in the future, India will become a candidate for an overweight position," said Mizuno.
"Vietnam will revive as a major investment opportunity," he added.
The Ho Chi Minh Stock Exchange is among the worst performers in Asia this year, having fallen more than 50 percent as the country deals with double-digit inflation.
Nomura Asset announced last month it would start managing the 30 billion yen Japan Fund, marking its full-scale entry into the U.S. retail mutual fund market.
Nomura Asset, which has plans to grow that fund to about 100 billion yen, will start with Japan-focused funds and then expand its product lineup to Asia-wide funds, Mizuno said.
Other Asian funds have also talked about their global growth strategies, seeking to emulate fund firms such as U.S. giants Fidelity and Franklin Templeton that have successfully expanded abroad.
But analysts have also said the going may get tough. Mirae Asset, South Korea's biggest asset manager, launched its first Indian product earlier this year amid great publicity. It has raised less than $25 million so far.
Asian asset managers such as South Korea's Mirae Asset are increasingly looking beyond their borders for growth. Last month, Nomura announced it would take over the management of the Japan Fund in the United States, billed as the world's oldest fund focused on Japanese equities.
But once high-flying regional stock markets, such as India and China, have sharply reversed course this year, falling victim to a weakening global economy, a continued global credit crisis, and increasingly, the specter of inflation.
But Nomura Asset is banking on the long-term growth potential for the region, as a handful of other Asian asset managers also bet that they can translate expertise gathered in years of operating within their borders to markets abroad.
"We would like to go into the Asian retail market," Takahide Mizuno, CIO of the asset management unit of Nomura Holdings (8604.T: Quote, Profile, Research), told the Reuters Japan Investment Summit.
Mizuno noted the expansion into Asia would likely start in countries where it has already established offices, pointing to South Korea, Singapore, Hong Kong, and Malaysia as targets.
Nomura Asset aims to grow overseas on its own, but in China and India, the fund may seek joint ventures or other alliances, Mizuno said, citing them as examples of countries "with unique cultures and unique regulations."
Nomura Asset had 24.3 trillion yen ($229.2 billion) in assets under management as of March 31.
It had previously said it was aiming to raise that to 43 trillion yen by March 2011, with two-thirds of the growth to come from its domestic retail business and the rest from its institutional investor business, mainly from overseas.
TANKING MARKETS
After posting five consecutive years of double-digit growth, the MSCI index of Asian stocks outside Japan .MIAPJ0000PUS has dropped some 20 percent so far this year, and is down about 29 percent from a record hit on November 1 2007.
Though Mizuno predicted difficult short-term conditions, he sees long-term potential in markets such as India and Vietnam, citing their economic growth potential, and predicted they will soon again become darlings of foreign investors.
"At some point in the future, India will become a candidate for an overweight position," said Mizuno.
"Vietnam will revive as a major investment opportunity," he added.
The Ho Chi Minh Stock Exchange is among the worst performers in Asia this year, having fallen more than 50 percent as the country deals with double-digit inflation.
Nomura Asset announced last month it would start managing the 30 billion yen Japan Fund, marking its full-scale entry into the U.S. retail mutual fund market.
Nomura Asset, which has plans to grow that fund to about 100 billion yen, will start with Japan-focused funds and then expand its product lineup to Asia-wide funds, Mizuno said.
Other Asian funds have also talked about their global growth strategies, seeking to emulate fund firms such as U.S. giants Fidelity and Franklin Templeton that have successfully expanded abroad.
But analysts have also said the going may get tough. Mirae Asset, South Korea's biggest asset manager, launched its first Indian product earlier this year amid great publicity. It has raised less than $25 million so far.
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