Daiwa Securities, Japan's second-largest brokerage firm, will offer separately managed accounts beginning next month with the aim of capturing another 30 billion to 50 billion yen, or $270 million to $450 million, from high-net-worth clients.
The move makes Daiwa the second Japanese brokerage, following third-ranked Nikko Cordial, to launch an SMA program. Nikko launched its service in April in hopes of raking in two trillion yen in the next 10 years (see MME 5/31/04).
Recent financial sector reforms have made it easier for Japanese brokerages to offer SMA products and services. In the U.S., assets held in SMAs totaled $506.6 billion at the end of 2003, according to industry trade association Money Management Institute.
Japanese investors largely don't invest in stocks or mutual funds, opting instead to conserve cash or use low-interest bank and other deposits. A mere 9% of the nation's $12 trillion in assets are put into stocks or investment funds.
Japanese brokerages, whose profit margins have widened on the back of a recovery in Tokyo stock prices, are looking to build market share and grow assets by offering a wider range of investment tools such as separately managed accounts.
Deutsche Bank to Sell Private Unit to Eaton Vance
The Boston office of Deutsche Bank's Scudder Private Investment Council will soon belong to Eaton Vance Corp., the companies announced last week.
The companies did not reveal terms of the sale but said Eaton Vance will assume $2.5 billion of assets. Eaton Vance will retain Deutsche's counselors and take over the investment advisory agreements already in place.
G. West Saltonstall, the vice president and head of Eaton's investment counsel department, which currently manages $1 billion in assets, will be the unit's new supervisor.
Saltonstall said of the deal, "Eaton Vance has been meeting the needs of high-net-worth investors since its founding in 1924. This transaction represents our commitment to growing and strengthening this important aspect of our business."
CheckFree Platform Signs First Institutional Manager
Wedge Capital Management, a Charlotte, N.C.-based institutional money manager, has become the first company to use CheckFree Corp.'s multiple strategy platform for institutional money management. Previously, only retail separately managed account managers used the platform, APL-MSP.
"Wedge Capital Management recognizes the value APL-MSP brings to its approach of managing institutional separate accounts, by fine-tuning an array of investment decisions right down to a particular holding and tax-lot, and completely automating through technology what is often a manually based process," said Alex Marasco, CheckFree's executive vice president and general manager.
Wedge, which has $4.1 billion in assets under management, is using the two-year old system mainly because of its versatility.
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