Rogge Global Partners and Tokio Fire & Marine Asset Management have formed a joint venture to offer fixed-income fund management to Japanese institutions, says John Graham, London-based partner at Rogge.
Rogge, a UK-based boutique fixed-income manager responsible for $6 billion of assets, has been rapidly growing its Japanese clientele. Last year it signed on the Pension Fund Association, and this year has notched corporate pension funds. It has amassed $800 million in assets from Japan over the past year.
It is owned by Old Mutual Group, a London-listed South African concern, which has acquired United Asset Management, which has had a Tokyo office catering to institutions.
That connection provided Rogge with the insight that the corporate pension market is shrinking as companies return to the government responsibility for the so-called government portion of corporate pensions (the daiko henjo). "To be successful in 2004 and 2005, we need government relationships," Graham says.
The firm therefore cast around for means of introduction to the quickly growing government sector. It found Tokio Fire & Marine Asset Management, a $12 billion fund manager that has the right connections and is looking to add global expertise.
The two groups founded a 50/50 joint venture, Tokio Marine Rogge, which is based in London. Each side is providing two directors to the board, with founder Olaf Rogge assuming the CEO role. This vehicle will now handle all of Rogge's existing and future Japan-related business, with Rogge portfolio managers effectively working for both companies.
Tokio Fire & Marine is also appointing one of its portfolio managers to work in London for the JV, which will give the new company insight into the Japanese market, and provide Tokio Fire & Marine with a direct line into what the JV is doing. Meanwhile the JV will handle the often expensive and laborious marketing and client servicing that Japanese institutions require, freeing Rogge from those duties.
Rogge has been around since 1994 and was established to cater to American pension funds, which at the time were the only market for fixed-income specialists. The US still makes up 75% of Rogge's business, with Asia rising quickly to 11% and Europe 8% (the rest is for Old Mutual). It has a total of 26 clients for six portfolio managers and six more analysts. The firm is looking to increase its assets under management but not to add clients, as it wants to retain a five-to-one ratio of clients to fund managers.
But it is rolling out new products. It has just introduced its first hedge fund, a global investment-grade long/short strategy that now has $46 million under management. "We plan to roll out more hedge funds in global fixed income and global macro," says Graham.