Singapore’s Fullerton Fund Management has opened an office in Tokyo and hired Fumio Izumi, PineBridge Investments' former Japan head of sales, to run it.
It is the firm’s second international office and has been in the works for two years, a Fullerton spokeswoman tells AsianInvestor. The firm, a subsidiary of Singaporean state investor Temasek, already has a branch in Beijing.
Izumi, who reports to Trevor Chudleigh, head of business development at Fullerton in Singapore, is joined initially by one other member of staff.
“Japan has been a key market for us since our founding as an independent asset manager,” says Manraj Sekhon, chief executive and chief investment officer at Fullerton. The firm received its first mandate from a Japanese client in 2005, after setting up in December 2003.
A spokeswoman for Fullerton tells AsianInvestor: “Establishing an office here has been part of our long-term business strategy for some time. Plans to open a Japan office were put in place two years ago.
Asked what kind of demand Fullerton is seeing from Japanese investors, the spokeswoman says: “What we see in Japan reflects what we see in the rest of the world. Investor demand for higher yields and returns is strong, and Asia and emerging market equities investment solutions still provide a good fit.
“Asia, as an investment category, is still limited in terms of providers in Japan," she adds, "which is why we see an opportunity in Japan as an Asia specialist.”
In addition to its institutional client base, Fullerton has relationships with retail distributors in Japan.
Asked if there are plans to put investment or research staff in place at any point, the spokeswoman says the firm does not invest in Japanese assets.
“The office represents a long-term business commitment for us, allowing us to strengthen existing relationships and build new partnerships,” she adds. “Generally, Abenomics is a positive for Japan and for our business.”
According to BNY Mellon, Japanese stocks took in net flows of $150 billion year on the back of Abenomics-related stimulus and monetary easing measures.
Meanwhile, domestic investors have been diversifying into international strategies, including Asian equities and fixed income, says Fullerton's Sekhon. He points to a desire among Japanese investors to achieve higher yields after years of being stuck in a low-interest-rate, low-return environment.
Indeed, sources point to a growing wave of interest last year among foreign asset managers in obtaining licences to operate in Japan in the expectation of Abenomics-related opportunities. Another fund house, Dimensonal Fund Advisors, opened in Tokyo in the first quarter of 2013, and more are expected to follow.
Fullerton's new Japan chief, Izumi, has 20 years of sales and marketing experience in Japan. He was with PineBridge from March 2011 to May 2013, before which he was head of institutional advisory at Schroders Investments (Japan) for four years. He has also held sales-related positions at Prudential Investment Management (Japan), Deutsche Bank and UBS.
PineBridge was unavailable to comment on whether Izumi had been or would be replaced.
With $9.7 billion in assets under management, Fullerton invests in equities, fixed income, money markets, currencies and alternatives.