UK-based Standard Life Investments (SLI) has hired Mitsuo Ohara as its first institutional sales head in Japan and plans to add another to the team in August, after setting up a Tokyo office and winning a local advisory licence in April.
These appointments – which will expand the Tokyo team to 13 – are part of the firm's bid to tap growing demand for foreign asset exposure amid an environment of negative interest rates. Japanese 10-year bond yields have been in negative territory since February and stood at -0.152% yesterday.
Ohara joined on June 1 from Northern Trust Global Investments, where he was Japan head of sales and client service. Northern Trust said it had no plans to replace him.
Neil Slater, SLI’s chief executive for Japan, said the $373 billion firm would make further hires in Tokyo depending on business requirements.
There is local demand for foreign fixed income and alternatives, but credit is easier to move into than alternatives, which demand longer consideration, said Slater. But there is interest in illiquid assets such as infrastructure, real estate and private equity, he noted.
Slater pointed to the changing mindset among institutional investors in Japan. “You can tell from the fact of the GPIF [the $1.2 trillion Government Pension Investment Fund] is asking publicly first time ever for foreign global equity managers,” he said. “They are doing it in English and using a professional consultant to run the process. It is a shift from 10 years ago.”
GPIF is looking to boost its alternatives and overseas exposure to boost returns, having unveiled a major overhaul of its asset allocation and external managers in October. It also invited bids for offshore active and passive equity managers in April.
SLI’s new advisory licence in Japan allows it to approach certain institutional investors and fund selectors, but it also plans to seek a discretionary licence so that it can market directly to pension funds and manage institutional mandates.
The fund house is also indirectly managing money for 200 Japanese pension clients through its local distribution partnership with Sumitomo Mitsui Trust Bank.