Initiation Speech
November 9, 2011
Mr. Christian Romeyer
Mr. Taketo Sei
Initiation Speech ��
“Asset Management in Japan”
Mr. Christian Romeyer
President, Amundi Japan Ltd.
Senior Country Officer for Japan, Crédit Agricole Group
1) Equity investment in Japan has evolved from individual to institutional investors and from individual stock investments to various fund investments including stocks and bonds. This evolution came hand in hand with expansion of pension assets and maturation of each investor.
2) Japan has a long history of financial transactions, including speculation, and individuals well disposed towards stock market investments. In the initial phase before well-organized asset management companies emerged, investors bought in individual stocks without making much logical analysis.
3) The first breakthrough in the asset management industry took place from around 1965 to 1970. Securities firms introduced the analytical method based on PER or PBR, which was immediately accepted by the stock market.
4) During the second stage that lasted up to the mid-1980s, individual investors’ assets as well as pension assets increased, and thus influenced various regulations on investment and led to the establishment of regulatory mechanism that protects individuals and assets. Fund managers and analysts have come to play an even greater role, which accelerated the development of the asset management industry.
5) Starting from the 1990s, we moved into the third stage, which is “maturation” stage, experiencing tougher competition while Japan plunged into the “lost 20 years” of sluggish economic growth. The asset management industry has become sophisticated, calling for performance-driven techniques and unique investment methods.
6) As the industry matures, regulations are being reinforced to protect retail investors and final beneficiaries.
7) Around 1971, domestic individual investors accounted for over 30% of the Tokyo Stock Exchange, while institutional investors (including foreign investors) were less than 15%. By 2010, the ratio reversed and institutional investors have accounted for nearly 50%, while individual investors dropped to 20%. Foreign investors are expanding their presence in the Japanese market.
8) Today, the Japanese asset management market size occupies 60% of the Asian market including Australia. Cautious and risk-averse attitude of individual Japanese investors has similarities with French people who prefer to hoard money under the mattress or bank deposits.
9) Many asset management companies, both in and out of Japan, are attracted to the market opportunity in this country and today there are over 80 such companies.
10) Asset management companies bear greater responsibility for fund holders or final beneficiaries of pension funds.
11) The asset management industry is expected to provide more sophisticated services, to gain trust from clients through excellent performance.
12) Going through turmoil in the financial market, newcomers have been attracted. Asset management companies have to propose products that are simple, clear-cut, easy-to-understand and within the risk tolerance of such new investors.
13) Asset management companies are intermediaries that create values through effective utilization of fund resources.
14) We are now at the dawn of a new era, urged to review many things. I am convinced the asset management industry will definitely expand in the future.
Initiation Speech ��
“Consulting Industry in Japan”
Mr. Taketo Sei
President, Aimnext Inc.
Let me explain the current situation of the consulting industry in Japan, by quoting three figures”200,” “2000” and “3000.”
Firstly, “200” is the number of consulting firms of moderate size (firms with over dozens of employees) in Japan. As there is neither business organization nor registration system, it is hard to grasp the precise number. Yet there is an internet site for would-be consultants, and 200 consulting firms are listed on this site, for recruiting new staff on a regular basis. In addition, an increasing number of companies have their own internal consulting division nowadays.
There are various types of consulting firms, some are like department stores providing services to wide-ranging industries, while other firms are like small boutiques specialized in a certain industry and field, like medical service, strategy or personnel administration. Their scope of activities is also diverse, some conduct business worldwide, while others operate exclusively in Japan.
Secondly, “2000” new graduates were employed by the leading 50 consulting firms in 2011, which indicates that the consulting industry has grown to a certain level. For your information, 1800 new graduates were employed by the top 10 auto companies.
Lastly, consulting companies generate “3000” oku (or 300 billion) yen of sales in Japan. In the US, the industry’s market size is said to be around 7 trillion yen. Supposing that the business consulting market size is proportionate to GDP levels, suggests there is ample room for growth in this country.
Before closing, let me give you my personal view on how to stimulate growth of the consulting industry. I believe incessant endeavor to “create” something new is crucial to survive in the shrinking domestic business market, due to declining birthrate and aging population. The ability to create and implement ideas is crucial to an organization making contributions to society.
Another point is how to turn the Japanese management style into a global model and help its implementation in other countries. I have worked for a typical Japanese company and an American consulting firm that exemplifies capitalism. My experiences taught me good points of each corporate culture. Sadly enough, an increasing number of Japanese workers seem to judge the Japanese management style to be outdated or not applicable for other countries.
I believe this is wrong. Many Japanese management methods are superior and applicable worldwide. The problem is the Japanese are not good at conceptualizing what we practice and disseminating its information. If we succeed in turning the Japanese management method into a global model, giving clear-cut explanations and disseminating it worldwide, I believe there are business chances for both our industry and our clients throughout the world