Magazine article American Banker

T. Rowe to Join Sumitomo, Daiwa in Japan Fund Venture

Magazine article American Banker

T. Rowe to Join Sumitomo, Daiwa in Japan Fund Venture

Article excerpt

By STEPHEN GARMHAUSEN

T. Rowe Price Associates, betting that Japan is poised for a fund boom, has become the latest U.S. mutual fund company to stake a claim in the country.

The Baltimore-based company announced it is paying $16 million for a 10% interest in an asset management company, to be headed by Sumitomo Bank Ltd. and Daiwa Securities Co., that will target Japanese retail and institutional investors.

T. Rowe executives also plan to use the Sumitomo-Daiwa joint venture, based in Tokyo, to sell Japanese investors a set of international funds it will manage with Robert Fleming Holdings Ltd., London.

"This is an enormous market," said George Roche, the president and chairman of T. Rowe. "It is potentially very significant."

The venture with Sumitomo, Japan's second-largest bank, and Daiwa, its second-largest brokerage firm and biggest mutual fund distributor, should be launched by April 1, said the spokesman for T. Rowe, which has $148 billion of assets under management.

The venture will begin with $29 billion of institutional portfolios and mutual funds that Daiwa and Sumitomo currently manage. Though T. Rowe will not manage the Japanese funds, it will contribute marketing expertise and help ensure a more disciplined, Western-style approach, in contrast to the momentum-investing approach Japanese managers are used to.

In jumping into the Japanese market, T. Rowe joins U.S. firms like Goldman, Sachs & Co., Alliance Capital, and Putnam Investments. All are banking on a wave of financial services reforms in Japan to open opportunities in retail investing and asset management for pension plans in a $10 trillion market, the world's second-largest. …

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