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Banking & Finance

T. Rowe Price expands services in yield-starved Japan

US asset manager focuses on multi-asset strategies for institutional investors

Institutional investors in Japan hunger for yields because interest rates have remained at ultralow levels. (Photo by Masayuki Terazawa)

NEW YORK -- U.S. asset management company T. Rowe Price will beef up operations in Japan, seeking to meet demand from pension funds, insurers and other investors struggling to find decent yields in a world of low interest rates.

The company will establish a team specializing in multi-asset investing strategies within its Japanese arm and send over staff from its U.S. headquarters this month, including global multi-asset portfolio manager Richard Coghlan. New strategists from Japan will be hired as well.

The expansion is part of an effort to grow T. Rowe's business outside the U.S. The company -- which ranks among the world's top 20 asset managers, with $1.14 trillion in assets under management at the end of July -- set up a full-fledged subsidiary for its Japanese operations in April 2018.

Actively managed funds are among T. Rowe's strengths. Multi-asset strategies that look to find the right balance of equities, bonds and other investments for each customer are a growth area for the company, which had $332.5 billion invested in such portfolios at the end of June.

Sebastien Page, head of T. Rowe's multi-asset division, said Japan offers some appealing investment opportunities as "improving governance seen through buybacks and ROE, along with the increasing number of startups, remains underappreciated."

But Page also said there were concerns about corporate earnings, predicting that the yen will strengthen as uncertainty pushes risk-averse investors toward safe havens. A stronger Japanese currency weighs on exporters' profits.

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