Table Speech

History and Future of Asset Investment and Asset Management

August 21, 2019

Mr. Hideyuki Takahashi
Director & Chairman,
State Street Trust and Banking Co., Ltd.

 The history of asset investment is said to have started in Scotland. There exist world renowned institutional investors up until now, such as Standard Life, Baillie Gifford or Scottish Widow. As the land is lean and the climate is harsh, men used to seek work on the Continent as mercenaries and often lost their lives. Relief of a bereaved family was a serious matter. This is how Scottish Widow, an insurance for widows, was born in the early 18th century. In order to increase the insurance fund steadily and stably, the basis for long-term investment was established.

 An investment trust started a little differently. In the middle of the 19th century, the middle-class was on a rise and they wanted to gain the same return as capitalists but with a small investment. The basis of investment trusts was established together with the system of trustee banks to safeguard assets.

 Later in the USA, with the birth of DC(Defined Contribution Plan), it explosively expanded, redoubled and reached over 2,000 trillion yen. Recently an investment trust called ETF (Exchange Traded Fund) is the mainstream and grew 10-fold in the USA during the past decade to exceed 400 trillion yen. The affluent class and institutional investors are seeking for higher returns even by taking risks, and the so-called alternative investments such as hedge funds, PE (private equity funds) and infrastructure investment expanded. As a result, investment methods became diversified and complex, and the volume became enormous.

 Investors can no longer manage their assets by themselves such as receiving dividends and interest, entry into a passbook or buying/selling based upon market valuation. Thus, asset management experts for Fiduciary Duty became indispensable. There are three functions for asset managers: trust operations, account settlements and clerical functions such as receiving dividends and interest or drafting and issuing asset management reports. This financial infrastructure service is indispensable in our daily life, just like public utility of water, electricity and gas. Therefore, it must be provided stably and at a low cost. New facility investments, particularly investment in IT is required to enjoy the benefits of scale merit and maintain competitiveness,

 We no longer have stock certificates as they shifted to digital data. There are no papers nor solidly built massive safes. Asset management banks only manage financial Big Data. This is the new value added for asset management banks.

 Through destructive innovation, entry from different sectors of business other than financial business became possible, as the core of new value added is data processing. The so-called Dis-intermediation excluding human-intermediation by technology and creating new value added will spread throughout the financial industry.

 With the progress of technology, collation or account settlements will not require human hands, thus experts with financial knowledge are not needed any more. Cost structures will change dramatically and competitors are not other financial institutions but the so-called GAFA including Google, Apple, Facebook and Amazon. Competition has already started with competitors having totally different rules and concepts.

Tokyo 2035

August 21, 2019

Mr. Hiroo Ichikawa
Honorary professor, Meiji University

 I majored in Urban Planning and I have been teaching Urban Policy in a Department of Political Science in Meiji University. Till I shifted to the university in 1997, I was a chief researcher of Fuji Research Institute of Fuji Bank and engaged in drawing up urban policy for the Tokyo Metropolitan Government over 30 years.

 My vocational classification is “Research of Governance”, not “Management Governance” but “Administrative Governance” which is a common practice overseas. 4 months before I joined Tokyo RC in 2017, I made a table speech here entitled “How Tokyo and Japan Will Change towards 2025”. My lifelong research theme is my hometown “Tokyo” and I have been making analysis from various perspectives. Tokyo is changing dramatically everyday towards the 2020 Tokyo Olympics, and I predict we will be able to get a clearer picture of Tokyo by 2025. I made a presentation on how Tokyo will change over the coming decade by focusing on three angles: environmental change, analysis of urban capability and the change of central Tokyo.

 Today I will talk about the project conducted for the Innovative City Forum held every October by the Urban Strategy Research Institute of the Mori Memorial Foundation of which I am a director. Out of “FUTURE LIVING”,” FUTURE WORK”,” FUTURE MOBILITY” and “FUTURE CITY”, let me introduce three scenes.

 The first scene is Roppongi. Drones and airplanes are flying in the air. In 20 years’ time quite a number of drones will be flying as well as many airplanes will be flying above the center of Tokyo by the expansion of flight zones, which will lead to an increase of slots for landing and takeoff at the airport. As a result, international flights will dramatically increase. Urban greenery will be abundant by the increase of roof gardens and greened wall surfaces.

 The next scene is Furukawa River in Azabu. At the time of the 1964 Tokyo Olympics, an urban expressway was built over the river and beautiful scenery was ruined mercilessly. The riverfront will be miraculously revived by the renovation of the expressway and people will enjoy sitting on the terrace of the riverfront just like in London along the Thames.

 The third scene is Shintora-dori, where people will prepare an event assisted by drones and robots. I expect robots will replace a certain percentage of labor force due to the declining population.

 It is easy to draw a dreamy picture, but it is not so easy to realize it by overcoming obstacles such as existing legal structures or our mindset that hasn’t changed over the years.

 We have made a 5-minute animation film on the Future of Tokyo. Please scan the QR code by your smartphone and enjoy.