The Japan Investment Advisors Association (JIAA) and others publish several data sets covering asset management and related markets in Japan. IJ examines the data to highlight facts and trends of interest to our international readers.
We tried to identify the JIAA survey’s most trusted managers in Japan of so-called “other” assets, including multi-asset strategies and alternative assets.
Recently, as fixed income asset yields have dropped, alternatives such as private equity (PE), real estate, and infrastructure have become popular choices among Japanese pension funds. Some pension managers found their must-have stable income in real estate funds. Others, aiming at a higher return over the long-term, have selected PE or infra funds. Such a change would have been unimaginable 10 years ago, when most pension managers shied away on principle from any financial instruments of low liquidity.
The multi-asset strategy has regained popularity in the mid-2010s, in part, because pension funds facing harder market conditions decided to outsource some portfolio management to professional asset managers. In reality, however, this type of outsourcing is not unfamiliar to Japanese pension funds. So-called "balanced funds," provided by trust banks and life insurers, were the only choice available until a change in regulations in 1997. "Balanced funds" consisting of stocks, bonds and real estate, can now be classified as multi-assets strategies, and even today some are sold as "balanced funds."
Although the JIAA survey doesn't offer a clear picture of the leading managers in multi-assets and in alternatives in Japan, we have identified some standouts.