Yoshiharu Okazaki is stepping down as president of Pictet Asset Management after 13 years. He can look back at his career with satisfaction, having taken a business with negligible assets and turning it into the largest foreign manager of mutual funds in Japan.
Pictet AM achieved that distinction in 2006 when its Pictet Global Utilities Fund reached ¥1.6 trillion ($16.3 billion), helping the firm surpass Fidelity and Goldman Sachs as the biggest providers to the local retail market.
Although for the funds industry in Tokyo, this was a surprise, Okazaki could show a perfect, neat J-curve of rising AUM since his tenure began in 1996. More than anyone else, he had discerned Japanese investors' demand for stable income that could reliably beat local interest rates, and the utilities fund, which focused on water-related infrastructure, fit the bill. It still does.
The firm has transferred Gavin Sharpe to Tokyo to serve as president, effective July 1, with Okazaki serving as non-executive chairman. This represents a new tone. Sharpe has been with the firm since 1987, in London, rising to the CFO role. As a member of Pictet AM's executive board, Sharpe's focus has been on human resources, compliance, internal audit and business risk. It is this background which prompted his transfer.
"We have grown to a certain size of business that needs to be maintained and expanded, and we need a structure to support that," Sharpe says, adding he will rely on advice from Okazaki in terms of branding and building relationships with distributors and investors.
He says Pictet has been able to maintain its staff numbers in Japan throughout the financial crisis, while some foreign fund houses have not. "This is an opportunity for us," Sharpe says.
Sharpe's first move will be to improve the corporate structure and governance to what he says will be "world class" standards. "We need to be leading edge in terms of compliance and business risk," he says.
Second is to assure clients of the firm's continuity at a time of upheaval in financial services worldwide. This includes updating distributors on Pictet's product line on a regular basis. Recently launched products the firm wants to emphasise include Japanese equities and a fund aimed at resource-rich equity markets. Last year it also launched a timber fund in Japan.
Third is to hire more people, particularly in client servicing. "I've seen some good CVs," Sharpe says, adding that he is looking opportunistically and is able to make an offer when the right people come along.
Sharpe and Okazaki say the firm would like to expand its institutional business, which they acknowledge it hasn't cracked. But for now the firm remains tied to a single product: the Global Utilities Fund, which after seeing AUM rocket has settled back to about ¥1.6 trillion of assets under management. The firm sources ¥1.8 trillion in total from the Japanese market. It seems that Sharpe's experience in governance is meant to enable the firm to maintain this success while generating additional sources of revenue.