Japan’s Mizuho hunting for deals to bolster asset management business

By Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) -Mizuho Financial Group is in talks with overseas asset managers about deals as the major Japanese banking group looks to more than double its assets under management to $1 trillion within 10 years, a senior executive told Reuters.

Mizuho, which has about 70 trillion yen ($474.71 billion) in assets under management, aims to join “the trillion-dollar club” within a decade, said Noriyuki Sato, the head of its asset management business, in an interview.

“That’s the threshold to be able to compete globally, not just in terms of volume but also quality,” he said.

The target includes private assets, which Mizuho hopes to boost from about 4 trillion yen to around 20 trillion yen.

Mizuho is the latest top Japanese bank to announce plans to beef up its asset management businesses through mergers and acquisitions, with the firms expecting an end to Japan’s decades-long deflation will spark a shift of dormant household savings into investments.

“We’ve been in full-fledged discussions with multiple overseas asset managers,” Sato said.

Deals could take the form of partnerships, investments or acquisitions, Sato said, adding that alternative asset classes such as private debt, private equity and infrastructure, as well as global stocks, are areas of focus for growth.

“We’d like to shift into high gear in alternative investments,” he said.

Japan is just beginning to see a shift into alternative assets, something that the United States saw years ago, said Sato, who joined Mizuho from Singapore’s PhillipCapital Group last April.

Mizuho’s rivals have been active in dealmaking, with Mitsubishi UFJ Financial Group buying London-based private credit firm AlbaCore Capital last year.

Sumitomo Mitsui Trust Holdings’ Nikko Asset Management last month entered into advanced discussions to buy a stake in French private debt firm Tikehau Capital.

($1 = 147.4600 yen)

(Reporting by Makiko Yamazaki and Ritsuko Shimizu; Editing by Jamie Freed)