Sumitomo Mitsui Financial has applied to Japanese regulators to offer hedge funds-of-funds and is also planning to offer investments that will focus on commodities, Bloomberg reports. The bank, Japan’s third largest, will manage the products through its brokerage subsidiary, SMBC Friend Securities, which it recently acquired for $1.6 billion, and sell the products through its 411 branches. “We have the advantage of a large distribution channel, enabling thorough marketing,” commented Terumasa Takahashi, head of consumer business development at Sumitomo Mitsui. Executives at Sumitomo Mitsui said that Japan’s economy appears poised for its longest period of expansion since World War II and that they want to tap into the $1.1 trillion of assets the nation’s Baby Boomers hold. “It’s important for banks to work with their brokerages to get a good grip on wealth,” said Kyoko Narita, an analyst with BNP Paribas in Tokyo. But doing so won’t be easy, Narita added, since “banks and brokerages in Japan remain two different cultures after a long period of separation.” Japan deregulated the financial services industry in 2004, permitting brokerages to offer managed funds.
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