Nikko AM splits chair-CEO role, plans more funds

Japan’s Nikko Asset Management is set to split the role of chairman and chief executive, having designated the ex-chief operating officer of Nomura, Takumi Shibata, for the former role.

Charles Beazley had previously held both positions as well as being president, and will remain CEO, a situation he feels happier with. He took up the dual roles in April last year, after Tim McCarthy retired, and assumed the additional title of president when Bill Wilder retired in April this year.

The firm will nominate Shibata as its candidate for chairman at the AGM on June 28, and once approved, the appointment will take effect on July 1.

“I told the board in November last year and again in February that it’s not best practice and I felt uncomfortable carrying three titles when one or two would do,” says Beazley. “So we talked to shareholders about splitting the roles, and they were very supportive.

“And when someone of Shibata-san’s stature becomes available, which is very rare in Japan, it’s good to grab them with both hands. It was a very logical move for us.”

Shibata is a financial markets veteran, having spent a long career at Nomura Group. He joined the firm in 1976, and was appointed director in 1998, managing director in 2000 and COO in 2008. His roles also included president and CEO of Nomura Asset Management.

The appointment doesn’t mean there will be any major change in strategy. That said, the firm will now be “moving faster”, says Beazley. “It’s an extraordinary time in Japan – there’s an enormous amount to do here.” And there are also the firm’s international expansion plans to consider.

Hence it makes sense that, since the CEO role will be consumed with even more day-to-day business, there should be a separate chairman as “the appointed guardian of governance”, he notes.

Asked about his plans for further acquisitions, Beazley says the firm still has its eye on Indonesia, Korea and Taiwan in particular, as he said last year. This comes after Nikko AM’s JV deal with India's Ambit Holdings Private, and the purchases of Singapore’s DBS Asset Management and Tyndall Investments in Australia in recent years.

“But someone has got to want to sell before you can buy,” he points out, and wherever Nikko AM plans to have a presence, it must be both for investment and sales staff, and the preference is not for a joint venture.

Nikko AM has come close to a couple of deals in the past year or so, he notes, but neither worked out in the end.

In any case, Japan is a major focus right now. The imminent big economic and societal changes coming from Shinzo Abe's government are going to have a big impact on the rest of the region, argues Beazley. “With China a bit flat now, Japan is looking pretty good.”

Following the success of the Nikko Gravity Americas Fund introduced last year, the firm has plans to launch some “very big” funds around July, with a global flavour.

There are also plans around the firm's Chinese joint venture, Rongtong Fund Management, set to be executed later this year, but Beazley declined to provide details.

Asked if Nikko AM plans to go ahead with the IPO that has been in the pipeline for several years, he answered in the affirmative. “We’re very clear about what our shareholders’ targets are, and we are well on the way to meeting them.”

The chairman-CEO split has provided a boost in terms of improved corporate governance, he points out. There’s no timetable for when the float will happen, adds Beazley, but it won’t be this year.