Mellon, Shinsei Team Up in Japanese Pension Market

August 15, 2002 ( - Mellon Financial and Shinsei Bank, Limited, have teamed up in a new joint venture investment advisory and trust company to provide investment management services to the Japanese pensions market.

The joint venture will be headquartered in Tokyo and launched in late 2002, subject to regulatory approval.

Shinsei and Mellon will each own half of the new company that will use Mellon’s 16 investment management subsidiaries and affiliates to provide the new venture’s client services. The companies said they will focus on global and international asset management.

Mellon Global Investments Japan Co. Ltd, will continue to offer Mellon asset management services to the Japanese retail and institutional non-pension markets.

Total assets invested in Japanese pension funds is approximately 270,000 billion yen. According to Cerrulli Associates, investment advisory companies currently have only 13.5% of the market amounting to approximately 35,000 billion yen. The market is expected to grow around 12% a year through 2005.

editor’s note :  Jo McBride, Editor & Publisher of Japan Pensions Industry Database (and a NewsDash reader) offers the following clarification on the Japanese pension market:

“At 31 March 2002 (the close of the Japanese financial year) Japan’s employment-based pension sector had approximately 111,775.9 billion yen in assets under management of which asset managers (known as ‘investment advisory companies’) were managing 37,783.5 billion yen or 34%.

The rest was in the hands of trust banks and life insurance companies, which in 1995 were the only entities allowed in the sector.  Twenty-seven percent of that 34% — or 9.41% of the total — was managed by wholly foreign-owned investment advisory firms while a further 2.62% of the total was with firms that are Japanese-foreign joint ventures.”