Founded in 2003, Fiera Capital is a Canada-based listed independent asset manager with approximately CAD$160 billion in assets under management. The firm delivers disciplined, high-conviction investment solutions across public and private markets as well as traditional and alternative asset classes across geographies and sectors. The firm has 11 unique investment boutiques under the Fiera Capital umbrella, and 15 locations across North America, Europe, and Asia. For more information please visit Fiera Capital’s official website.
We are pleased to announce that Fiera Capital has established its Tokyo office as part of the firm’s long-term strategy to expand distribution operations in the Asia-Pacific region. This new office will serve as the centerpoint for Fiera Capital’s regional distribution in APAC.
About Fiera Capital Asia Japan
Founded in 2003, Fiera Capital is a Canada-based listed independent asset manager with approximately CAD$160 billion in assets under management. The firm delivers disciplined, high-conviction investment solutions across public and private markets as well as traditional and alternative asset classes across geographies and sectors. The firm has 11 unique investment boutiques under the Fiera Capital umbrella, and 15 locations across North America, Europe, and Asia. For more information please visit Fiera Capital’s official website.
Strategic Vision for Japan
Q1: What are Fiera Capital's strategic objectives and the specific value propositions in the Japanese market?
CJ: I think the timing of our office opening here is particularly relevant for 4 reasons:
Fiera Capital already has an existing relationship with one of the largest distributors here. To help and support them it makes sense to be on the ground.
We think there is a huge strategic shift of the institutional and retail asset allocations in Japan. Cash-heavy portfolios in the case of retail investors and bond-heavy portfolios in the case of institutional investors. Those pools of capital are beginning to shift, institutional pools are looking at private markets for income with inflation protection, there is low institutional penetration in Japan compared to global peers. In retail there is a rise of active allocation into equities, with the rise in popularity of equities over the last 2 years and increasing NISA inflows into equities. Fiera Capital has good products to serve these strategic shifts in asset allocation.
It is a particularly interesting time to think about adding a Japan dedicated portfolio to Fiera Capital’s multi-boutique model. This is something we have been thinking about, we are constructive on Japanese equities and on private equity here in Japan, and we would love to find some partners we could work with to grow their international distribution. Fiera Capital has a scaled distribution business globally and it would be interesting to find a Japanese public or private market product to distribute and to contribute to grow the markets in Japan.
I believe that the structural Japanese yen weakness story is unlikely to continue to last forever and we think the current low valuation of the yen makes it an attractive time to set up an on-shore office.
Those are the four key reasons. If there is a fifth point, it would be to find more strategic partners for Fiera Capital to work with. We have had conversations with all the big gatekeepers. On the other hand, we have 11 investment boutiques that sit within Fiera Capital and we would love to find partnerships with a number of those boutiques with large Japanese asset managers.
Q2: How long has Fiera Capital been strategizing its expansion into Japan, and what factors influenced the timing of this initiative?
CJ:
Fiera Capital had historically run a centralized distribution model until 3 to 4 years ago, which makes sense for a small to mid sized manager. As we grew to our current size, managing about US$120 billion, to expand beyond our core marketplace of Canada, where we are one of the largest independent asset managers, you really need to have an international/global distribution model. Three years ago we shifted from a centralized distribution model to a regional distribution model, now with distribution heads in the US, Europe/Middle East and Asia. It [regional distribution] allows us to not only expand our target clients, but also to build local relationships, which I think is equally important. At the same time, we began to think about what our strategic priorities should be in Asia and Europe/Middle East. In Europe/Middle East, we have made a clear priority in the Middle East, with office openings in Qatar and Dubai, which have been successful sources of capital for us. For Asia, we decided that Japan should be at the center of our plans from a distribution perspective. We have offices in Hong Kong and Singapore, but we see the opportunity in Japan being particularly significant so it was quite natural for us to open an office here. My predecessor, Rob Petty, heading Asia distributions at that time, spent a year looking at Japan and had third-party distribution relationships, which made sense at the beginning of this process. When he hired me two years ago, it was with the clear mandate to open an office here and build a business locally.
Q3: In what ways do you anticipate Fiera Capital's presence in Tokyo will enhance relationships with existing and potential Japanese investors/business partners?
CJ:
It is a night and day difference, you cannot build a long-term and sustainable business here from off-shore. I often do 3-5 meetings a day, about 300-400 a year, and you cannot do that flying in from off-shore. It’s also very important to have competent, Japanese locals in the office. Our local staff here make a huge difference, there are a number of things they do here that I cannot. As we get closer to forming distribution partnerships with large asset managers, there is a lot of communication & dialogue required. On a daily basis we get phone calls and emails we must respond to in Japanese, so having people on the ground is an absolute essential for building long-term relationships here. Without an office here you can probably get 3-4 LPs or some other important clients, but you need a physical presence to build a long term and sustainable business relationship.
Why Tokyo?
Q4: What were the primary reasons for selecting Tokyo as the location for your Japanese headquarters among the major cities in Japan?
CJ:
Tokyo is the financial center of Japan, the same way that London is the financial center of the UK. All the major financial holding companies, conglomerates, and distribution companies are here in Tokyo. There are still important pools of capital in other cities, but you have to be in Tokyo. If you are doing 3-5 client meetings a day there are at least 200-300 firms for me to meet with in Tokyo. It does not mean that other cities in Japan are not important, but Tokyo is the financial center of Japan and it will remain that way.
Q5: In what ways does Tokyo offer distinct strategic advantages over other major financial hubs in the APAC region and any other regions?
CJ:
To start with is the sheer size of the capital base here. You have $15-20 trillion in potential investment capital here in Japan. Government pension plans are about $3-4 trillion, private pension plans are also about $3-4 trillion, the wealth market is about $15 trillion of which half sits in cash. That’s just an extremely large pool of capital, you just don’t have such sizable pools of capital in the rest of APAC and it is one of the largest pools of potential investment capital in the world. The second thing is proximity to the clients. Just in Marunouchi alone, I can see about 60% of the most important financial institutions in the country within a 10 to 15 minute walk from our office. Tokyo also sees a huge amount of people coming through, anyone traveling to Asia’s first stop is getting to be Tokyo. More and more foreign visitors create a hub, more foreign visitors coming means more investment professionals, more investment professionals means more investment opportunities, the more investment opportunities the more it becomes a hub, it's a self fulfilling prophecy. The local asset managers here are open and welcoming, they will meet with you as it is their mandate to meet with new managers. Getting access to some of the end pools of capital are difficult but getting access to gatekeeper asset managers and distributors is relatively easy. I think the fact that domestic asset managers are being pushed by the government to be seen as open and willing partners is important. Compared to when I was here a few decades ago, the English language issue is also improving. If you want to treat the end clients it must be in Japanese, but your first line of direct engagement, with local gatekeeper asset managers, can be in English.
The majority of staff in the Hong Kong and Singapore offices are investment teams, not distribution teams. Our first senior distribution hire was in Japan [myself]. The heads of distribution in the Hong Kong and Singapore offices were added after my hiring. When Rob Petty took over as head of Asia, he always saw Japan as the distribution priority, compared to South Korea, Hong Kong and Singapore.
Setup Experience and Local Support
Q6: What challenges did you encounter during the setup process in Tokyo, and how did you address them?
CJ:
If I was a non-Japanese speaking foreigner with little to no local relationships I would find it quite difficult. That being said, even though I speak Japanese, I would have found this very hard to do on my own. The support of Takafumi Sudo and Saria Kume, some of our local staff members, was essential. You cannot do this with one person. The support that FinCity.Tokyo and Visual Alpha have given us, the clear instructions and timeline, was also extremely useful. Overall, it’s a very Japanese process. If I was not fluent both culturally and linguistically it would have been much more difficult.
I think Tokyo has a bit further to go for the ease of doing business, it’s gotten better but it's not as easy as Hong Kong and Singapore. Tokyo is getting better, but the other two are staying the same. You can set up a company in Singapore very quickly and you don’t need to hire people on the ground to do it. This is more about Tokyo catching up quickly with what smaller and more nimble places have done.
Q7: How have FinCity.Tokyo and Visual Alpha supported your establishment in Tokyo, and which aspects of their assistance did you find most beneficial?
Takafumi:
We are very satisfied with the support we have received from FinCity.Tokyo and Visual Alpha.
CJ:
From my perspective, it has worked very well and has been very beneficial. The most important thing for me was that FinCity.Tokyo and Visual Alpha provided clear guidelines and a clear roadmap for us to follow. Even when it was just Kume and I, we had a very clear timeline to follow with clear instructions on what to submit and when. FinCity.Tokyo and Visual Alpha did an excellent job of taking the slightly complicated Japanese process and making it user-friendly.
Q8: Reflecting on the establishment process, what insights or recommendations would you offer to other companies considering expansion into Tokyo?
CJ:
You have to have a Japanese speaker, you must be patient, and you must be prepared. One of the complaints we have heard is about the requirement of an on-shore compliance officer, firms want to use a centralized compliance hub in English. The reality is that’s just not possible, you need an experienced Japanese speaker who can navigate the complexities of the system.
easoned professional with over 30 years of experience in the asset management industry, particularly focusing on Asia and the Emerging Markets, with a special emphasis on Japan. He is tasked with expanding the firm's presence in Japan and overseeing and strengthening existing relationships across Asia.
Responsible for strengthening the firm’s operational and compliance infrastructure and plays a key role in supporting the expansion of Fiera’s presence and investment platform in the Japanese market.
Focuses on private markets coverage and business development, working closely with institutional investors in Japan. She brings in more than 20 years of experience in the Japanese market.
Contributes to the team through generating new business opportunities and managing existing client relationships. She originally started as a consultant for Fiera Capital’s Japan expansion and was an integral part of the eventual Tokyo office establishment.
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