Arab News Japan

TOKYO: Middle Eastern investors are more open to investing in Japanese equities than Western investors because of their familiarity with Japan, according to HISHIDA Yoshio, chief executive officer at Sumitomo Mitsui Trust Asset Management, in a report published by Japanese media outlet Nikkei.

Sumitomo Mitsui Trust has around $600 billion in assets under management and is one of the largest asset managers in Asia. Itis increasingly winning mandates in the Middle East, which makes up 90 percent of its assets from investors outside Japan.

“Most Middle Eastern countries are quite familiar with Japan because of the long economic relationship we’ve had,” Hishida says.

Middle East-based sovereign wealth funds and institutional investors account for the lion’s share of the Japanese asset manager’s roughly $30 billion of assets from overseas investors, the company said. 

The Nikkei report says Sumitomo started attracting a considerable pool of assets from investors outside Japan in 2012 when it won its first mandate in the Middle East on increased interest in Japan after Shinzo Abe regained the position of prime minister. 

Middle Eastern investors are “neutral” to challenges that often come with investing in Japan such as the country’s location and language barriers, Hishida said. 

Sumitomo engages in discussions with Middle Eastern investors to meet Shariah standards and keeps separate accounts for them given the large size of their investments, he said. 

The Japanese asset manager has streamlined its process of responding to Middle Eastern investors’ inquiries, shortening the lag in communication compared to its Western peers, he added.