Tokio Marine AM looks beyond group to find new leader

The president and CEO of the $44 billion Tokio Marine Asset Management, Yoichiro Iwama, has made an unorthodox decision to recruit an outsider to succeed him.

Akiyoshi Oba, the CEO and COO at Mizuho Pension Research Institute, which belongs to a rival financial group, will formally join Tokio Marine AM next month as its new president and CEO. Iwama will continue to serve the company in an advisory capacity.

"The asset-management industry faces a difficult time," Iwama explains. "In order to develop our own operations and become a world-class player, we need an experienced and capable person who can be a leader on the first day he takes charge of the company."

This flies in the face of convention, which would have Tokio Marine Insurance Group, which owns 100% of the asset-management company, place one of its own executives at the helm -- as it did with Iwama four years ago.

Oba worked at Mizuho Trust & Banking from 1998 to 2007, at which point he moved to its pension research institute, and has spent his career immersed in pension and asset-management issues, rather than insurance, banking or other areas. (He will be replaced at Mizuho by Kinya Ninagawa.)

Iwama outlines the situation that Oba is inheriting as follows: the institutional business is shrinking, and firms cannot rely on serving plan sponsors anymore; as the size of the Japanese economy shrinks, due in part to demographic trends, a Japanese asset manager relying just on domestic securities expertise cannot grow. Therefore the firm will continue to strengthen its marketing efforts to Asian and European pensions and other institutional investors, as well as provide more global products to domestic clients.

Although the firm relies on partnerships with Rogge Global Investments (for the past seven years) and Threadneedle Asset Management (brand new) for global fixed income and equity products, it also wants to develop its internal capabilities. In Singapore it has a well-regarded Asian equities team, as well as global fixed-income capabilities in London. It also has global equities capabilities in its New York office, but Iwama identifies this as an area that needs strengthening. But whether this is by adding resources in New York, or in Tokyo, or in conjunction bankerwith Threadneedle, has not been decided; this will be one of Oba's challenges.

Oba says the business in Japan is changing quickly, as institutions seek greater exposure to overseas assets. "If we strengthen our capabilities, we can capture this demand," he says, adding that only three or four Japanese houses will ultimately win the battle for such business.