{"id":146876,"date":"2025-09-16T07:36:13","date_gmt":"2025-09-16T07:36:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/146876\/"},"modified":"2025-09-16T07:36:13","modified_gmt":"2025-09-16T07:36:13","slug":"can-tokyo-tempt-finance-workers-to-manage-its-trillions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/146876\/","title":{"rendered":"Can Tokyo tempt finance workers to manage its trillions?"},"content":{"rendered":"

Earlier this year, a Tokyo-based compliance officer was ready to call it quits. A job at an asset manager entering the country had fallen through after two months of painful negotiation.<\/p>\n

Within two weeks, however, he was swamped with offers from a hedge fund, a cryptocurrency outfit and another investment firm offering base salaries of close to \u00a530mn ($204,000). He was 69 years old.<\/p>\n

The compliance officer\u2019s experience underlines both the frenzy of interest Tokyo is attracting from global financial institutions, which could finally transform it into one of the world\u2019s pre-eminent financial capitals \u2014 and the stumbling blocks that remain. <\/p>\n

Japan<\/a> has done a lot to ease the pain of getting a licence to raise funds or open an investment shop, from making forms available in English and generous subsidies to cover costs. But it still takes months from start to finish, say people familiar with the process \u2014 and that is even if you have the patience and skill to navigate the system. <\/p>\n

\u201cI think he almost talked himself out of that job, when he explained the licensing process and they realised how long it might take,\u201d said Vid Gunapala of recruiter Michael Page.<\/p>\n

\u201cThere are probably only around 20 or 30 international compliance officers in the city and they keep moving around. I have four clients currently asking me to find one if they are available,\u201d said one senior lawyer in the industry in Tokyo.<\/p>\n

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The draw is simple. Huge volumes of once stagnant Japanese capital, spurred by rising inflation and government policy, stand ready for deployment. And international investors \u2014 from sovereign wealth funds to pension pot managers in the US \u2014 would like to take advantage. <\/p>\n

According to people in the industry, the two busiest flights for New York bankers right now are to Abu Dhabi and Tokyo. As one high-level dealmaker put it: \u201cThat\u2019s where the money is.\u201d<\/p>\n

But with available fund managers and compliance officers thin on the ground, it is like, as one investor put it, \u201csqueezing so much capital through a pinhole\u201d.<\/p>\n

\u201cYou can blame it on tax or on language but\u2009.\u2009.\u2009.\u2009it is still just very hard to get the right staff in Japan,\u201d said a fund manager who examined setting up in Tokyo before choosing to invest in Japan from Singapore.<\/p>\n

\"TokyoJapan has sought to make it easier to secure a licence to raise funds or open an investment shop \u00a9 Androniki Christodoulou\/FT<\/p>\n

For decades, Japan\u2019s capital market was tightly regulated and built around bank lending, cross-shareholdings and cosy relationships. That brought stability but also engendered complacency in managers who were unused to listening to shareholders. Companies listed for status rather than to raise capital. That is now changing. <\/p>\n

A decade ago, the country went all-in on a campaign to promote Tokyo as Asia\u2019s foremost financial hub, sending emissaries to Hong Kong and Singapore to lure money away from China\u2019s shadow. The economy ministry, financial regulator and stock exchange are all backing an unprecedented wave of domestic dealmaking. Japanese companies, as buyers and sellers, have been directly involved in many of the world\u2019s biggest M&A deals of 2025. <\/p>\n

Then two years ago, Japan declared itself an \u201casset management nation\u201d, convinced that asset management was crucial to improving corporate performance and getting capital flowing to the right places.<\/p>\n

\u201cWe want to see an asset manager break into the top 20 companies. We have banks, insurers, but no asset managers,\u201d said a senior official at the country\u2019s markets regulator, the Financial Services Agency.<\/p>\n

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Geopolitics is also primed for Tokyo to take advantage. Hong Kong\u2019s success is increasingly as a financial outpost serving mainland China rather than the west. Across the Pacific, investors are trying to get capital out of President Donald Trump\u2019s America.<\/p>\n

\u201c\u200b\u200bI was expecting it would take a long time for Tokyo\u2019s transformation to take place, but I think there is a change \u2014 like it or not \u2014 in the global financial environment, triggered by Trump 2.0,\u201d said Hiroshi Nakaso, a former deputy governor of the Bank of Japan and one of the drivers of Japan\u2019s push.<\/p>\n

Things are moving on the ground. Although many investors in Japan are still based abroad, there are hundreds of domestic and international firms now in Tokyo, from Steve Cohen\u2019s Point72 Asset Management, which is doubling its office space, and Chinese investment firm Hillhouse, which is doubling staff.<\/p>\n

But there is still a long way to go. Private equity bankers and lawyers put Japan 20 years or more behind the US market. Hiromi Yamaji, one of the country\u2019s foremost corporate governance advocates and the chief executive of the Tokyo Stock Exchange, estimates that the country\u2019s reforms are just 15 per cent or 20 per cent complete.<\/p>\n

\u201cI would like to put shine back on Tokyo\u2019s appeal as a hub for international finance but there are still some challenges that remain,\u201d acknowledged Tokyo\u2019s Governor Yuriko Koike.<\/p>\n

\"PeopleHuge volumes of once stagnant Japanese capital, spurred by rising inflation and government policy, stand ready for deployment \u00a9 Androniki Christodoulou\/FT<\/p>\n

Growth in the investment industry remains too slow, say asset managers and recruitment professionals, who blame tax and language barriers.<\/p>\n

The number of people in asset management has increased by almost 65 per cent since 2012, according to the Japan Investment Advisers Association, to close to 25,000. Banking employment has declined over roughly the same period. <\/p>\n

The figures for young people are concerning, however. The number of people between the ages of 20 and 34 going into finance and insurance has fallen from 610,000 in 2002, when comparative records began, to a low of 380,000 last year, according to figures from the Ministry of Internal Affairs and Communications.<\/p>\n

\u201cTokyo still faces challenges in establishing itself as a global fund management hub\u2009.\u2009.\u2009.\u2009there\u2019s a persistent mismatch between the demand for asset management talent and the available supply,\u201d said Yuki Soga, founder of investment advisory Penrose Japan. <\/p>\n

Michael Page\u2019s Gunapala said: \u201cSome clients are still holding out for a unicorn, a Japanese person who speaks English, who has the right skillset, but it\u2019s a limited resource and the universe is shrinking.\u201d<\/p>\n

\"AGrowth in Japan\u2019s investment industry remains too slow \u00a9 Androniki Christodoulou\/FT<\/p>\n

The problem is partly due to too few foreign finance workers. As of October last year there were 12,872 in the country, according to figures from the Ministry of Health, Labour and Welfare. That is 0.6 per cent of all foreign workers in Japan and compares with 6,961 in 2008 and 10,152 in 2018.<\/p>\n

Those already working in Japan \u2014 foreign or otherwise \u2014 can also be hard to poach away.<\/p>\n

\u201cI do think there are enough qualified people. But whether there\u2019s a functioning market for that kind of talent \u2014 that\u2019s another matter\u2009.\u2009.\u2009.\u2009We need more foreign companies to come into Japan and hire these people \u2014 because that\u2019s how a real market for this kind of talent will start to develop,\u201d said Yutaka Ito, the commissioner of Japan\u2019s FSA. <\/p>\n

Yoshiki Kumazawa, of recruiter Morgan McKinley in Japan, said: \u201cAsset management is growing and gradually people are hunting for staff, but it\u2019s very domestic, almost all Japanese, so it\u2019s very difficult. If someone\u2019s base pay is \u00a510mn, the offer from the global asset management firm trying to approach a Japanese guy probably has to be at least 1.5 times higher.\u201d<\/p>\n

\"AJapan believes asset management is crucial to improving corporate performance and getting capital flowing to the right places \u00a9 Androniki Christodoulou\/FT<\/p>\n

The war for talent does not stop with traditional asset managers. The competition at private equity groups and hedge funds is even more extreme. <\/p>\n

Buyout groups trying to enter Japan are stymied by an inability to poach experienced managers, and if you want to hire a Japanese government bond trader, companies are paying between $20mn and $35mn to lure talent.<\/p>\n

The government is trying to accelerate things itself with initiatives that allow compliance to be outsourced and develop emerging managers \u2014 although they have yet to deliver meaningful results.<\/p>\n

At the same time, the biggest insurers and asset managers are answering the government\u2019s call in other ways, with a spate of deals abroad and strategic partnerships at home that improve reach and skill without relying on hiring more people in Japan.<\/p>\n

\u201cIn\u2009.\u2009.\u2009.\u2009any industry where you want to upgrade fast, I feel that bringing in high-end international partners, and allowing them to ride on the back of a domestic partner that has the full infrastructure, is far more effective than encouraging them to set up from scratch,\u201d said Stefanie Drews, president and chief executive of Amova Asset Management, formerly Nikko Asset Management. Amova has inked a partnership with France\u2019s Tikehau Capital. <\/p>\n

\"AJapan is trying to kick-start asset management with initiatives that allow compliance to be outsourced and develop emerging managers \u00a9 Androniki Christodoulou\/FT<\/p>\n

But for all that effort, industry insiders say that if Tokyo wants to become a true international financial centre, it will simply need more people to come.<\/p>\n

\u201cYou have to be on the ground to understand Japanese companies,\u201d said Hideki Kinuhata, the founder of SILQ, a hedge fund based in the city. \u201cTo do fundamental investing in Japan, it helps to breathe the air.\u201d<\/p>\n

It remains unlikely that Tokyo will cut its taxes \u2014 on income, inheritance and beyond \u2014 to levels that rival other Asian hubs, limiting the number of internationally mobile financiers likely to relocate. <\/p>\n

\u201cIt\u2019s a big headache. When the compensation becomes more than\u2009.\u2009.\u2009.\u2009\u00a540mn, suddenly the tax rate jumps actually and\u2009.\u2009.\u2009.\u2009people start saying \u2018May I go to Singapore or may I go to Hong Kong\u2019,\u201d said Masahiro Kihara, chief executive of Mizuho, one of Japan\u2019s biggest banks.<\/p>\n

That leaves a long road ahead before Japan can produce enough domestic talent to support the industry.<\/p>\n

\u201cThey need to make this industry attractive from a much earlier point, and that is a very long game they have not thought through,\u201d said a senior figure in asset management in Japan.<\/p>\n

A senior hedge fund manager with a growing presence in the city said: \u201cIt takes eight to 10 years to train a fully fledged portfolio manager so we have to start that now for the ecosystem to come. It\u2019s true that Japan is back but you can\u2019t just create the people to execute on that opportunity all at once.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier this year, a Tokyo-based compliance officer was ready to call it quits. A job at an asset…\n","protected":false},"author":2,"featured_media":146877,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-146876","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/146876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=146876"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/146876\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/146877"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=146876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=146876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=146876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}