Nomura Holdings¡¯ CEO sees more scope to get business from Japanese investors who are looking to private markets as a way to diversify their assets.
¡°Compared with the share of private assets in portfolios overseas, Japan¡¯s exposure is still quite low,¡± CEO Kentaro Okuda said in an interview broadcast on TV Tokyo on Thursday. ¡°That means there¡¯s still room to include private products to enhance performance and stabilize returns. We see significant potential in this area and intend to pursue it actively.¡±
Okuda has spearheaded a push by Nomura into private markets, partly to complement its traditional business selling stocks and bonds to retail investors. The firm¡¯s alternative assets under management, including private investments, climbed 25% in the past year to ?2.7 trillion ($18 billion) as of June.
Global investment firms are increasingly trying to tap the wealth of Japanese households, which have more than $14 trillion in financial assets ¡ª about half of which is in cash. Steve Schwarzman, CEO of Blackstone, the world¡¯s biggest alternative asset manager, told an audience in Tokyo this week that he sees momentum in the government¡¯s efforts to expand opportunities for local investors.
Asked about recent concerns in private credit markets following the bankruptcy of two U.S. auto-related companies, Okuda said it¡¯s true that unlisted products provide less publicly available information than listed ones.
¡°That is precisely why we take care to thoroughly explain each product¡¯s characteristics and risks¡± to clients, he said in the television interview.
Nomura had about $8.9 million of credit exposure related to First Brands Group, the U.S. auto-parts manufacturer that filed for bankruptcy in September, the Nikkei newspaper reported last week.
Okuda also said Nomura¡¯s pipeline for advising on mergers and acquisitions is growing fast as more Japanese companies seek to boost efficiency.
¡°Our own pipeline is expanding rapidly, including cross-border investments,¡± he said on the TV program. ¡°We expect this strong activity among Japanese companies to persist going forward.¡±
Nomura is the top adviser on Japan-related M&A deals so far this year, followed by Goldman Sachs Group and Morgan Stanley, according to data compiled by Bloomberg. Japan¡¯s biggest brokerage is scheduled to report quarterly results next Tuesday.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.