Switzerland’s Vontobel Asset Management aims to broaden its client focus to Japan’s $7.4 trillion bank and insurer segment with the hire of a salesman, Naohiko Tabei, from PineBridge Investments. Juerg Fritschi, deputy Asia-Pacific head at Vontobel AM, will also now focus solely on Japan, whereas until last month his remit had also included Australia.
The fund house, whose $1 billion in Japan-sourced assets is in global and emerging-market equities, now hopes to attract money to its fixed-income strategies, notably those focused on investment-grade bonds, unconstrained global debt and other specialty products.
Tabei joined on August 1 in Hong Kong as executive director of institutional clients and consultant relations after five years as PineBridge’s Japan head of institutional sales. Before that he held the same role at Schroders. His focus has been largely on fixed income, and that is set to remain the case. PineBridge did not respond to a request for comment by press time.
Tabei now reports to Hong Kong-based Fritschi (pictured below), who had been the sole salesman for Japan and will continue to focus on expanding the equities business and developing new partnerships.
More Japan opportunities
Fritschi’s remit had also included Australia for seven years, but from August 1 his focus has shifted purely to Japan, in light of the market's size and the growth in opportunities there. Sydney-based Bobby Bostic continues to run the Australia and New Zealand business.
Vontobel AM does not have an office in Tokyo and has no plans for further hires there at this point, Fritschi told AsianInvestor.
In Japan, the firm has mainly targeted – through its partnership with local firm Sumitomo Mitsui Asset Management – the $2.9 trillion pension fund segment, from where it sources $1 billion of its regional $10 billion in client assets.
Now it wants to widen its scope to include the $7.4 trillion of assets owned by the country's financial institutions. He said Tabei had relationships with around 40 such firms, covering the full spectrum of banks and insurers.
Demand for foreign assets
Reflecting a regional trend, Japanese institutions – including the $1.2 trillion Government Pension Investment Fund (GPIF), corporate pensions and insurers – are increasingly eyeing overseas assets to boost yield.
“A key rationale for Tabei’s hire is the trend among financial institutions to shift away from JGBs [Japan government bonds] with their ultra-low and negative interest rates, and raise exposure to international loans and non-yen bonds,” said Fritschi.
Vontobel AM is looking to tout its European investment-grade corporate bond strategies in particular, having built up its fixed income capabilities in the past five years. For instance, the firm last year acquired a 60% stake in UK-based fixed income specialist TwentyFour Asset Management,
Opportunities have also opened up on the equities side for foreign fund houses. Japanese public pensions' typical policy allocation to overseas stocks, such as GPIF, is now 25% (having doubled from 12% in October 2014), and many corporate retirement funds are working to similar targets.
Moreover, Vontobel sees Japanese pension funds and institutions paying more attention to environment, social and governance (ESG) factors in respect of their equity investments.
Beyond the institutional segment, the firm is not making any active moves to build business through direct retail channels, noted Fritschi. It is most likely to do so opportunistically through sub-advisory or feeder fund business, as Sicav products cannot be sold in Japan.