Japan's Low-Profile Fund Managers Gain a Little Limelight
TOKYO --
Warren Buffett
and
Peter Lynch
, while not exactly household names, at least enjoy the recognition of the
CNBC
-watching masses. Buffett's utterances can move a stock and Lynch, who helped propel
Fidelity
into the world's largest fund company, is, at least in some circles, better known than
Don Rickles
, the comedian with whom he appears in television commercials.
Indeed, the role of the U.S. fund manager is an amalgam of stock-picking savvy, marketing marvel and self-promotional performance art. Beloved by his fund holders (at least when times are good) and feared by his competitors, the money manager is a proactive oracle, changing the future with his very vision of it.
So pity his Japanese counterpart.
While the U.S. fund manager is a veritable financial rock-and-roll star, his Japanese colleague is a mere roadie. The name of his company, not his own, is used to sell his product, and high-profile salesmen take credit when money flows in. The fund manager, as all the rest of the world knows, merely schleps stocks in and out of the portfolio. What kind of talent could that possibly take?
Quite a bit, say an increasing number of perturbed Japanese portfolio managers, whose companies are warming to the idea that the man who chooses the stocks going into a fund may have a role in its performance.
Gone are the days when fund managers were interchangeable functionaries; they're now viewed as irreplaceable assets. Rather than being judged by their years of service, a time-honored benchmark of firm fealty, they're increasingly measured by the returns they generate. And in a break with the country's rigid business culture, which has emphasized corporate solidarity rather than individual showmanship, big brokerage powerhouses are using the star power of their fund managers to woo clients.
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"The individual is now looking for professionals," says Shuhei Abe, president of
Sparx Asset Management
, who ran money for
George Soros
and
Nomura Securities International
before setting up his own company 10 years ago. "The company name doesn't mean anything if returns aren't being enhanced."
The Sparx-managed
Lombard Odier Invest Japanese OTC Fund
, which invests in smaller companies, is up more than 170% since its inception in April 1995.
Japan's OTC index
, by comparison, is up a relatively anemic 33%.
Compared to the U.S., where heavy-hitter and small-fry fund managers offer their views on television and in print constantly, Japan is still involved in a timid experiment with its mutual fund industry. But with Japan's pension system on the verge of chaos -- four workers support every pensioner, a statistic that is expected to be halved in 25 years -- more fund managers, like Abe, are advertising themselves with their products. And with high expectations that a 401(k)-like pension scheme will be introduced, all fund managers have a vested interest in enhancing their personal reputations.
"Those investors who had money in pensions had never felt like they were stockholders," says Hidehiro Tomioka, director of investments at
Invesco Asset Management Japan
. "But now that pension funds are managed by asset management companies, they will start feeling like stock owners."
Still, not everyone is convinced that the break with the old ways is right. "Fund managers who are desperate for customers are advertising with their photos in the newspapers," says Toru Ohara, who is director of equities at
Tokio Marine Asset Management
and has 22 years of fund management experience under his belt. He says he doesn't use his photograph in advertisements because the performance of the pension fund he manages -- it's up 40.3% this fiscal year, when compared to the
Nikkei
index's 14.3% rise -- speaks for itself.
But he did offer this reporter a passport photo to accompany this story.
