TOKYO -- Asset managers here and abroad are scrambling to capture Japanese high-net-worth clients looking for alternatives to their conventional investment strategies amid rock-bottom bond yields.
The charge is being led by two Swiss private banking groups. Julius Baer seeks to grow assets under management in Asia, including Japan, by 60% to 100 billion Swiss francs ($100 billion). The company has installed a desk geared toward Japanese nationals at its Singapore offices. Julius Baer is also providing support for family offices catering to the ultra-wealthy.
Meanwhile, Bank Lombard Odier & Co. is enlarging its Asian footprint as a group, adding more staff to its Japanese consulting and other businesses. Lombard Odier is also aggressively forming partnerships with Japanese financial institutions, including Chiba Bank and Shizuoka Bank, in a push to capture more customers. Plans call for adding even more partner institutions.
Mid-tier Japanese financial groups are also starting to cater to the wealthy set. Tokai Tokyo Financial Holdings started a membership service offering investment advice and other amenities for that demographic. Deposited assets have grown to about 200 billion yen ($1.79 billion), and Tokai Tokyo plans to roll out more services, such as recommending hospitals and retirement homes.
These companies are also targeting younger inheritors. Julius Baer holds workshops twice a year for 18-to-28 year-olds at its headquarters in Switzerland. CEOs are invited to those events to give lectures on marketing and other strategies. Tokai Tokyo plans to start a matchmaking service for the children of wealthy clients.
The business of targeting wealthy Japanese individuals can be capricious, considering that the clientele usually prefers a conservative investment approach, centered on Japanese government bonds. European multinational HSBC decided to pull out of those operations in 2012.
But the Bank of Japan's negative rate policy has upended the landscape. "In a low-interest environment, Japanese investors have to change their perspective," said Wolfgang Humbert-Droz, managing director in Japan for Julius Baer.