Special Feature | Initiatives to Enhance Nomura Group's Asset Management Business

Nomura Group's mission is to help enrich society through its expertise in the capital markets. Since its founding, Nomura has provided a wide range of financial services, helping drive the flow of risk capital, and contributing to the development of the financial and capital markets and the provision of optimal solutions to its clients.

Under its "Policy Plan for Promoting Japan as a Leading Asset Management Center," the Japanese government aims to achieve a virtuous cycle of growth and distribution, in which Japan's household savings flow into investments and the benefits of increased corporate value are returned to households, leading to further investment and consumption. Nomura recognizes the critical role it plays in achieving this plan.

Nomura will contribute to making Japan a leading asset management center and to creating a virtuous investment cycle that helps resolve social issues through the following initiatives.

Strategic positioning of Nomura Group's asset management business

Nomura has positioned the Investment Management Division, which plays a key role in the asset management business, as one of its three core business segments.

The Investment Management Division covers the broader asset management business and was established in April 2021 with the aim to enhance Nomura’s product lineup and services to meet the diversified investment needs of clients. The division brings together all investment and asset management companies within Nomura Group, including traditional asset management firms such as Nomura Asset Management (NAM) and alternative investment management companies. Its aim is to achieve a virtuous cycle of investment that helps resolve social issues by delivering products and services across various asset classes, from traditional assets such as stocks and bonds to alternative assets such as private equity.

Nomura positions the Investment Management Division as a growth business. The quality and lineup of the investment products, services and solutions the division provides are directly linked to client satisfaction and medium- to long-term asset expansion. By investing capital and human resources more aggressively and pursuing growth opportunities, Nomura will place greater focus on the Investment Management Division in group management. Nomura will strive to meet the expectations of various stakeholders including clients by not only pursuing growth in assets under management, but also by providing high value-added asset management services supported by advanced investment capabilities and solutions.

Nomura leverages the comprehensive strengths of the group to expand its asset management business. For example, since the 1990s Nomura has been working to improve financial literacy in society as a whole through financial and economic education. To provide asset management services to a wider range of clients, Nomura has also expanded its workplace services, and asset formation and asset management services using digital technology.

In addition to the Investment Management Division, Nomura will take full advantage of the group's strengths, including the Wealth Management Division’s wealth management capabilities, Nomura Trust and Banking's (NTB) administration services, and Nomura Fiduciary Research & Consulting's (NFRC) advisory services, to consistently grow its asset management business and help clients expand their assets over the medium- to long-term.

Policy for expanding investment capabilities

Nomura Group believes that a long-term commitment to the acquisition and development of highly skilled investment professionals is paramount in enhancing its asset management capabilities. Nomura views this as one of the most important management issues, and will continue to invest capital and human resources to improve its investment capabilities through the following initiatives, as well as diversifying its investment targets and strategies.

Expanding investment capabilities

Since the establishment of the Investment Management Division, Nomura has focused on strengthening its global investment strategy in the public markets, enhancing its credit and sustainable investment strategy, and expanding investments in private and real assets. One example of this is investing in private companies at the growth stage and investing in unlisted companies to help resolve business succession issues. Nomura is committed to contributing to the sustainable growth of the economy and society by diversifying its investment strategies and deepening and enhancing the connection between investors and investment strategies.

Partnerships and inorganic growth

Nomura is actively strengthening and expanding its investment capabilities, including partnering with expert firms, acquiring external investment teams, and incorporating a variety of inorganic growth strategies.

Enhancing investment capabilities

To make its in-house capabilities more competitive, as of November 2023 Nomura has invested approximately 85 billion yen in seed investments to develop new investment strategies and products, develop internal investment professionals, build its investment track record, as well as for R&D investments to enter new business areas and untapped markets.

To further enhance its investment capabilities, Nomura will expand such investments to more than 100 billon yen.

Within this framework, as a new initiative, Nomura will expand the scope to include emerging asset management companies (commonly known as Emerging Managers), foreign asset management companies entering Japan for the first time, and collaboration in new businesses with existing asset management companies and partners from different industries. This aims to contribute to the advancement of asset management in Japan through the discovery and cultivation of emerging asset management companies, and by promoting the entry of foreign asset management firms and enhancing Nomura Group's investment capabilities and solutions.

Recruitment and compensation systems

Asset managers in the Investment Management Division have adopted a competitive compensation system that matches clients' interests by linking the system with medium- to long-term investment performance. In addition, NAM, the core company within the Investment Management Division, undertakes initiatives such as (1) course-specific recruitment to develop highly specialized professionals, (2) in-house development of active investment professionals, (3) emphasizing performance-based evaluations in asset management (pay-for-performance), and development of a healthy, competitive environment.

Strengthening Product Governance

Nomura Group recognizes the importance of product governance in delivering products that align with the best interests of clients, and in achieving the stable household-based asset formation needed to make Japan a leading asset management center. Nomura is continuously upgrading its efforts, including through the following initiatives by NAM.

Developing business management and corporate governance of asset management business

Nomura Group provides high value-added products and services to domestic and international clients through a network spanning approximately 30 countries and regions around the world and collaborating across the Wealth Management Division, Investment Management Division and Wholesale Division. Developing an appropriate operational and governance structure is fundamental to fulfilling Nomura’s fiduciary duties as an asset manager. Nomura Group is implementing the following to enhance its organization.

Nomura Group will continue to work towards further enhancing the operational and governance structure across the entire group, including asset management-related businesses.

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