Asset Management Company
In an era of lengthening lifespans, we will support customers' medium– to long-term asset formation to contribute to growth in financial assets in Japan as part of a unified group.
Our basic policy is to raise the added value of our asset management business to meet the changing needs of our customers by strengthening our investment capabilities and ability to provide solutions, and by developing products and providing services in line with our customers' medium– to long–term asset formation needs as we enter an age of longevity. In addition, we will enhance cost control by establishing an efficient and robust business base through the development of organizational integration management centered on business process and IT system integration, and the implementation of operational process reforms utilizing digital innovation. We will contribute to growth in financial assets in Japan by shifting to a high capital efficiency structure for our asset management business and working together with Mizuho Bank, Mizuho Trust & Banking, Mizuho Securities, and Asset Management One, to support customers' medium– to long–term asset formation.
Business environment and challenges
As the environment surrounding our asset management business undergoes major changes, such as longer life spans, the continuing low interest rate environment, and the spread of digital devices, customer needs are also changing. For retail investors, we believe that asset management services for asset formation for the future are still in the developmental stage amidst this age of longevity. High–level consulting capabilities are needed to respond to the increasing diversification of pension plans and investment solutions for pension funds and other clients who play an important role in people's ability to prepare for retirement. On the investment side, as we continue to find ourselves in a difficult investment environment due to negative interest rates, institutional investors are expecting us to provide high added value. In light of this, we will need to further improve our investment capabilities by offering alternative investment strategies and utilizing technologies, such as AI and big data.
Trends in performance
In fiscal 2018, we generated a net inflow in publicly traded investment trusts designed for long–term investment. However, Net Business Profits fell short of our targets as a result of a decline in market value due to worsening market conditions and outflows from products designed for institutional investors.
In the future, we will aim to achieve our targets under the 5–Year Business Plan by strengthening our operational capabilities through a process of selection and focus, placing greater emphasis on our consulting and solutions businesses, and shifting to a more efficient business structure.
|Net Business Profits||17.0||16.0||(1.0)||13.0||18.0||23.0|
Results are based on FY2018 management accounting rules (including Net Gains Related to ETFs), targets are estimates based on FY2019 management accounting rules.
Progress on key strategies
Focusing on asset management services for an age of longevity
In order to support our customers' life plans and goals in terms of asset management, we are focusing on product development, including those for customers with little prior experience of investing, and providing solutions such as fund wraps. In addition, we will raise awareness of the importance of asset formation by offering defined contribution corporate pensions and individual–type defined contribution pension plan (iDeCo) services, as well as disseminating educational materials on investing. We will also actively support distributors, by holding seminars, informational sessions, and other events, in order to help drive the financial asset market.
Selection of and focus on solution services with high customer demand
As customers' needs shift to investment strategies that offset lower interest rates and minimize the impact of market conditions, we are focusing our corporate resources on alternative investments, such as real estate and loans, and on absolute return strategies. This fiscal year, for clients such as pension funds and institutional investors whose needs are diversifying, we have established new specialized departments in Mizuho Trust & Banking and Asset Management One to focus on providing comprehensive consulting and solution services.
Shifting to a more efficient business structure
We have integrated our core system in order to maximize the profitability of Asset Management One, where corporate resources related to the group's asset management functions have been consolidated. In addition, we will fundamentally revise our current operations in each department of the Asset Management Company by introducing automated processes that utilize technologies, such as RPA, in order to improve operational efficiency and raise productivity and added value.
Launch of long–term asset formation fund targeting individuals
In July 2018, Asset Management One introduced a JPY–denominated principal–protected investment trust, the first of its kind in Japan, * for which net assets exceed JPY200 billion. We are confident that this fund will contribute to more active investment in Japan as many of the investors in the fund are first–time investors. Mizuho will continue to provide asset management services that support the asset formation of individual investors.
* Based on analysis by Asset Management One, this is the first publicly traded principal protected investment trust in Japan with a guarantee period of 10 years.
Launch of global infrastructure debt fund
Asset Management One Alternative Investments, a subsidiary of Asset Management One specializing in alternative investments, has launched an infrastructure debt fund. The fund provides investors with attractive investment opportunities and invests in infrastructure projects that are essential for the sustainable development of the countries and local communities they are located in. We will continue to provide excellent investment opportunities by leveraging the strengths of the group.