BNP Paribas Investment Partners (BNPP IP) is moving to overhaul its business in Japan, following changes to the firm’s structure elsewhere in Asia, said Ryohei Shimazaki, the new Tokyo-based chief executive.
The asset management business aims to work more closely with BNP Paribas’s corporate and investment banking arm on the development, distribution and sourcing of products in the country.
BNPP IP Japan is re-examining its relationship with the group as a whole and looking at rebuilding its business to be more closely aligned with the group’s other divisions, said Shimazaki. The hope is that this would allow the Japan funds arm to build more client and distribution relationships by leveraging its links with the bank’s other units. The finer details are still being worked out.
A spokeswoman declined to say whether this move towards closer integration was specific to Japan or would be replicated elsewhere.
No new hires are planned, and Shimazaki declined to comment on whether there would be any staff departures as a result of the changes.
The plans follow restructuring of parts of the business elsewhere in Asia. For example, in December BNPP IP restructured its regional sales and client servicing teams along institutional lines, as reported.
Since clients have become more complex and diverse in terms of their needs, it makes sense to have local partners helping to strengthen marketing and product capabilities “in a precise way”, said Shimazaki.
For example, Japan’s pension funds have been significantly restructuring their portfolios, including moving into alternative strategies, such as smart beta, real assets and infrastructure, he added. One example is the $1.4 trillion Government Pension Investment Fund, which is looking at new asset types, such as emerging-market allocations, to boost its returns and diversify its portfolio.
Similarly, the retail market has been changing, such as through the introduction of the Nippon Individual Savings Account, and moves into more diversified investments, such as from traditional bank loans into multi-asset fixed income and real estate investment trusts.
As a result, BNPP IP plans to bring new products to the market, including absolute-return, unconstrained and inflation-linked fixed income strategies, which it sees growing in popularity.
The Japan business runs ¥800 billion ($7.5 billion) in assets, but could achieve a multiple of that figure, said Shimazaki, working on the basis of what rivals have achieved with similar models.
The French firm’s overhaul comes as other European banks have restructured or otherwise overhauled their asset management businesses in recent times, as they grapple with rising costs and regulatory pressures. Credit Suisse and Deutsche Bank are two firms to have made such moves in the past two years.