Some facts and findings in this new Opalesque Japan Roundtable will surprise many financial professionals. Learn directly from Japan-based investment veterans how the financial crisis has changed investing in Japan and asset raising from Japanese institutions, and what new opportunities are arising.
A Reality Check for visiting hedge fund managers
In their quest to raise assets, considerable numbers of overseas managers are visiting Japanese institutions each month, looking for funding and assuming that the Japanese must be ready to invest money "merely because they have it, whereas it is not there some other places." However, many allocators in Japan are still in shell shock: Chris Wells from White and Case, who lives and works in Tokyo since 1983, says "it will take time for allocators to realize how much they really have lost. A lot of investment staff aren't even telling their bosses how bad it is."
Paradigm Change: Brand does not allure Japanese investors any more
However, more than has been true for a long time, the ability to compete for Japanese assets is much more equal today than before, because with the financial crisis, "the shine has come off of the big
name hedge fund managers." According to Wells, "Japanese allocators, who traditionally tend to be
pretty picky consumers concerned with name value, have lost this type of fixation on brands
and perceived reputation. While before they may have been blinded by the light of the big
famous asset managers or hedge fund names, now it matters less, all names are more equal.
The questions for managers will be: how did you do last quarter? Where are you going? How
good are you at communicating where you are going? Do we fully understand your strategy?"
Japanese assets no more "sticky"
Rory Kennedy from UMJ adds that historically "you have to put more effort into getting Japanese
institutional money. But in return, the consensus was that that Japanese money would therefore be 'sticky' and would stay longer in your funds. However, following poor performance across hedge fund strategies over the last two years, it seems that from now on hedge funds will have to put as much effort or more into raising Japanese money, but it will be no more loyal than any other money in the world. In fact, it may be less loyal because they usually insist on liquidity as well."
The Opalesque Japan 2009 Roundtable was sponsored by AIMA Japan and took place on April 16th at the Tokyo office of Nikko Citi. I want to thank Ed Rogers from Rogers Investment Advisors and Koichi Shijima from Nikko Citi for helping me to put the following Roundtable together:
Shinichiro Shiraki, Founding Member, Monex Alternative Investments
Chris Wells, Partner, White & Case
Koichi Shijima, Director, Nikko Citi
Rory Kennedy, COO, United Managers Japan (UMJ)
Ed Rogers, CEO, Rogers Investment Advisors
Yhu Kuni, Portfolio Manager, Stats Investment Management
The evolution of Japanese hedge fund industry - what are the new managers and strategies?
What impact does the ailing Japanese real estate market have on the economy?
What is the number one mistake when Western firms hire Japanese staff?
Why each investor in Asian funds should do significant due diligence on the fund's ability to manage their foreign exchange exposures.
All previously published Opalesque Roundtables can be found in the Roundtable archive on our website (under "Publications"). Enjoy "listening in" to the 2009 Opalesque Japan Roundtable - 33 pages of intelligence!
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