Mizuho Trust & Banking is on a roll. The world of managing corporate and public pension money in Japan is not usually one of dramatic moves, but Mizuho has attracted a huge amount of assets so far this fiscal year.
From April to June -- the first quarter of Japan's financial year -- Mizuho more than doubled its pension assets, from ¥4 trillion as of March 31 to ¥10.7 trillion ($119 billion) as of June 30, according to the Hong Kong-based Japan Pensions Industry Database.
This has propelled it to third place, behind Sumitomo Trust & Banking (which manages ¥14.8 trillion, or $164 billion, of pension assets) and Barclays Global Investors (¥14.4 trillion, $160 billion). The former bronze placeholder, State Street Global Advisors, is now fourth, with ¥4.7 trillion. SSgA also saw its pension AUM grow over the quarter, but by a more modest scale.
The top 10 is rounded out by Nomura Asset Management, Diam, Tokio Marine Asset Management, Northern Trust Global Investments, BlackRock and Morgan Stanley, in that order.
Once BlackRock officially acquires BGI as of December 1, it will become the biggest manager of Japanese pension assets, although that may be a short-lived , as Sumitomo T&B intends to acquire Chuo Mitsui Trust & Banking and Chuo Mitsui Asset. Sumitomo has also recently acquired Nikko Asset Management, which is ranked 11th in terms of pension assets.
Mizuho T&B started the financial year with one corporate mandate and nine government ones. In the spring it won an additional corporate mandate, and one more public one -- which was huge. Although the records aren't transparent, Jo McBride, who publishes the database, reckons it must have come from a public fund of considerable scale -- which probably means the ¥1.5 trillion Government Pension Investment Fund.
GPIF records show that as of April 1, Mizuho T&B had already been awarded five mandates worth over ¥8 trillion, half of which was for passively managed domestic bonds. Mizuho Asset Management, an affiliate, holds two more mandates, says McBride. Over the course of 2009, Mizuho has reportedly tripled its client staff and added to other support teams, she adds.
Trust banks traditionally dominated pension management, but the 'big bang' reforms of 1998 ushered in a period in which asset-management firms, with their nimbleness, superior product mix and global background, won the lion's share of mandates. Over the past few years, however, trust banks have staged a rebound, particularly as they figured out how to offer passive and quantitative products and to work on the basis of segregated accounts.
McBride says the big question now is whether Mitsubishi UFJ Trust & Banking, which manages ¥11.1 trillion in pooled accounts, will seek segregated accounts and therefore target corporate and public pension money.