Nomura aims to grow wealth management unit through international acquisitions

Unlock the Editor’s Digest for free: Nomura CEO on Global Acquisitions and Wealth Management Shift

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In the latest edition of the Editor’s Digest, one of the featured stories covers Nomura’s chief executive, Kentaro Okuda, and his ambitious plans to expand the wealth management business of Japan’s biggest brokerage and investment bank. In a recent interview with the Financial Times, Okuda outlined Nomura’s strategic shift towards wealth management and its adoption of a consultancy “mindset.”

As part of this push into private equity and private credit markets, Okuda is on the hunt for global acquisitions to enhance Nomura’s asset management capacity. He is targeting asset managers outside Japan who specialize in alternative assets, as well as advisory businesses abroad.

Despite facing challenges such as the fallout from the Archegos Capital collapse in 2021, Okuda is focused on lowering costs and reducing Nomura’s reliance on volatile revenue streams from investment banking. He sees a significant opportunity in the expected transfer of Japanese household wealth from cash and deposits into higher yielding investments.

With Japanese investors currently allocating close to zero percent of their assets into private equity and private debt, Okuda anticipates a shift towards alternative assets in the near future. As Japan’s central bank monetary policy normalizes and inflation returns, households are expected to reconsider their savings strategies, creating new opportunities for wealth and asset management firms.

Major global private equity firms like Blackstone and Carlyle are already targeting Japanese individuals for their funds, while institutions like Japan’s Government Pension Investment Fund are looking to allocate more of their assets into alternative investments. Analysts predict a “momentous change” in Japan’s wealth management industry, with significant revenue opportunities for banks and rivals vying for the business of wealthy customers.

Nomura has rebranded its retail brokerage operations as the “Wealth Management” division, signaling a shift towards offering higher value services and investment advice. Okuda emphasizes the importance of changing the mindset of brokers from sales-focused to consultancy-driven, in order to better serve wealthy clients.

To expand its reach to affluent customers, Nomura has formed alliances with regional Japanese banks and is prepared to compete with domestic megabanks and foreign groups in the wealth management space. While Okuda acknowledges the intensifying competition, he remains optimistic about Nomura’s ability to succeed in this evolving market.

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