Grygo is the chief content officer for FTF & FTF News.
Mitsubishi UFJ Financial Group (MUFG) quietly announced what could turn out to be a major wave in the global asset management industry.
MUFG, the holding company for commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing services, recently announced that it has begun implementing an asset management (AM) business strategy that MUFG officials say will make its new fourth pillar of business the top AM firm in Japan “with a global presence.”
Specifically, the Mitsubishi UFJ Asset Management (MUAM) group wants to achieve 200 trillion yen (approximately $1.35 trillion) in assets under management (AUM) by March 2030.
“Our target is to double assets under management from the current 100 trillion yen to 200 trillion yen by the end of fiscal year 2029,” according to a press release from MUFG. In terms of business strategy, we define the AM business as one of MUFG’s core businesses and position our asset management company, Mitsubishi UFJ Asset Management (MUAM) as our fourth pillar alongside the bank, the trust bank, and the securities business,” according to the bank.
MUFG officials say that this will be accomplished “by providing investment services … with expertise gathered from both within and outside MUFG while strengthening the governance framework of our asset management companies,” according to the official announcement.
This will be in line with “the Japanese government’s announcement of its vision to promote Japan as a leading asset management center,” according to MUFG. “The asset management business represents a key endeavor for creating a virtuous cycle of growth and asset income, as well as stimulating the Japanese economy by accelerating the shift from savings to investment and asset formation, and MUFG is positioning this business as one of our medium to long term growth strategies.”
The bank will leverage its “advantage of being Japan’s number one investor services provider to promote business process outsourcing (BPO) service contracting for middle and back office operations. Our aim is to contribute to improving the efficiency of the entire asset management industry by providing an environment where asset management companies and institutional investors can concentrate on investing. Our target for business volume is to double our BPO contracting balance from 40 trillion yen to 100 trillion by March 31, 2030,” officials say.
MUFG plans to enhance:
- Investment Capabilities: “… Especially in private markets, by consolidating expertise and functions within and outside MUFG (including optimizing investment functions in credit and alternative investment, further collaboration with Morgan Stanley, inorganic growth strategy, etc.);”
- Business Infrastructure and AM culture: “Reform remuneration framework to attract and retain top caliber investment professionals, as well as introduce new training programs for investment talent (MUFG’s version of a global emerging manager program);”
- The AM Governance Framework: “Ensure the independence of MUAM’s management, increase transparency, and strengthen product governance;”
- The Investment Services Business: MUAM will “provide an environment in which asset management companies can concentrate on investment by promoting BPO service contracting for middle and back office operations and providing the industry’s first single party net asset value calculation service. … Our target for business volume is to double our BPO contracting balance from 40 trillion yen to 100 trillion by March 31, 2030.”
Among the many initiatives underway will be:
- Investment advice improvements: “Along with using the ‘Investment Management Advice Chain’ model to provide value-added advisory services and relevant information, strive to create proposals for comprehensive solutions by taking goals-based approaches that utilize digital technologies;”
- Online securities functions: “Provide AU Kabucom Securities Co., Ltd.’s convenient and low-cost trading platform in response to securities trading needs;” and
- More help for asset owners: “Provide support for investment product selection based on participants’ financial literacy, including expanding the functions of the D-Canvas app aimed at defined contribution pension plan participants.”
This is big news for Japan and MUFG’s competitors. It could also prove to be fair warning for MUFG’s competitors on a global scale.
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