Sumitomo Mitsui Trust Holdings is moving responsibility for SuMi TRUST, Japan’s largest asset management group with USD727 billion assets under management, from Sumitomo Trust Bank into Sumitomo Mitsui Trust Asset Management to strengthen its overall asset management business.
The company writes: “With the continued harsh asset management environment of low interest rates worldwide, and increasing price volatility in a wide-range of assets, etc., for clients of all sizes, from individuals and corporations to institutional investors, there are increasing expectations on asset management companies to provide stable and high-quality investment returns, and the provision of products that contribute to future asset-formation primarily through medium- to long-term investment has become an important social mission for asset management companies.
“In addition, as a further social mission, asset management companies are urged to contribute to Japan’s economic growth through sophistication of the investment chain, by providing growth capital through asset management products and making sustainable improvements to corporate value through constructive dialogue.
“In order to meet these expectations, SuMi TRUST, which has been providing services for corporate and institutional investors for many years, will split its asset management functions, which feature high-level know-how and quality, and strategically integrate aforementioned functions with SuMi TRUST AM, which has been aiming to expand its business from individual investors, focusing on defined contribution pensions, fund wraps, and index trusts, etc. We aim to concentrate and proactively allocate our management resources to growth areas.
“As a new asset management company that boasts of being among the largest in scale in Japan, the new company will focus on development of asset management products that will allow clients to entrust, with peace of mind, their medium- to long-term asset formation, and will aim to be an asset management company that has nationally well-known brand power, with recognition from many clients that ‘SuMi TRUST AM is the most reliable partner in medium-to long-term investment’.
“The new company will aim to thoroughly strengthen its asset management capabilities, and it will be equipped with an extensive line-up that is responsive to the broad-range of investor needs, and will pursue the maximisation of client profits by responding swiftly to the various client needs.
“Sumitomo Mitsui Trust Group, as a financial group specialised in trust banking, has as its management philosophy, the fulfilment of “trustee’s responsibilities” – which are the origin of fiduciary duties. In this specific matter of the split and integration of the asset management business, in order to contribute to business conduct that is still more thoroughly client-oriented, and the improvement of management independence and transparency, the new company intends to continue to enhance its corporate governance framework through measures such as, for example, actively inviting external experts with high-level knowledge to serve as independent external directors.
“For the Business Split and Integration, we will, effective on August 1, 2017, implement business segregation within the company regarding the asset management operations relating to the fiduciary services business of SuMi TRUST, which is to be the subject of the integration, and we will commence concrete preparations.
“Based on detailed review and discussions, and subject to matters such as necessary resolutions of the board of directors and the shareholder of each company, and filings with the relevant Japanese and overseas authorities, and approvals, we will aim for integration during Fiscal Year 2018.”