Nomura is reported to have an $8.9m credit exposure to First Brands Group, a US auto parts manufacturer that declared bankruptcy in September. Credit: beeboys/Shutterstock.com.
Nomura Holdings CEO Kentaro Okuda believes there is significant potential to attract more business from Japanese investors who are increasingly turning to private markets to diversify their investment portfolios, reported Bloomberg.
Okuda has led a push by the company into private markets, partially to complement its conventional business of selling stocks and bonds to retail investors.
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Over the past year, the company’s alternative assets under management, inclusive of private investments, claims to have surged by 25% to reach Y2.7tn (approximately $18bn) as of June.
Bloomberg report stated that the broader context for this strategic move is the vast wealth held by Japanese households, which totals over $14tn in financial assets.
Notably, around half of this wealth is held in cash, presenting a ripe market for investment firms.
Alternative asset manager Blackstone’s CEO, Steve Schwarzman, echoed this sentiment in Tokyo, acknowledging the Japanese government’s drive to broaden investment avenues for local investors.
Addressing the recent apprehensions surrounding private credit markets, particularly after the insolvency of two US automotive companies, Okuda acknowledged the inherent challenges in private markets, such as the limited availability of public information compared to their listed counterparts.
Recently, Nikkei reported that Nomura has an $8.9m credit exposure to First Brands Group, an auto parts manufacturer in the US that declared bankruptcy in September.
In an interview broadcast on TV Tokyo, Okuda said “Compared with the share of private assets in portfolios overseas, Japan’s exposure is still quite low.
“That means there’s still room to include private products to enhance performance and stabilise returns. We see significant potential in this area and intend to pursue it actively.”
Furthermore, Okuda revealed that Nomura is witnessing a rapid expansion in its advisory services for mergers and acquisitions, as Japanese firms increasingly seek to enhance operational efficiency.
In June, Bloomberg reported that Nomura Holdings has decided to shut down its Zhejiang office in China by the end of this year.
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AloJapan.com