Sumitomo Trust & Banking has established a new business unit called the global product management office in a bid to develop institutional investment clients outside of Japan.

Hitoshi Miyoshi, who previously ran institutional marketing for Sumitomo's domestic asset management business, has been appointed executive vice president in charge of the new unit. He reports to Takaaki Hatabe, co-president of Sumitomo Trust, who played a key role in the decision to appeal to global investors.

This puts Sumitomo in line with other Japanese asset management companies that are trying to expand their international businesses, from the established Nomura Asset Management to firms including Nikko Asset Management, DaiwaSB Investments and DLIBJ Asset Management (Diam).

Miyoshi says the group's target is to have raised Ñ300 billion ($2.6 billion) from overseas clients within the next three years - a respectable sum although still less than 1% of its current total AUM of Ñ21 trillion.

The firm has also set up an office in Luxembourg with two Japanese staff who will market products to European clients. Initially the firm will market two Japanese equity funds, one long-only and one long/short. Investment consultants have told Sumitomo that its long/short fund, which has a five-year track record, has a good strategy but the risk level is too low. Therefore Sumitomo is also creating a new long/short fund that follows the same strategy but is leveraged to go 200% long and 200% short.

Miyoshi is also marketing to funds of hedge funds based in Asia, which are interested in Japan equity strategies. The firm has a relationship with the Hong Kong office of RCM, a global equity unit of Allianz Global Investors, in which they share research. But Sumitomo doesn't plan to attempt a retail strategy outside of Japan.