Nomura Asset Management is changing how it evaluates portfolio managers to put greater weight on longer-term investment performance, part of a push by Japan’s largest asset manager to raise its capabilities closer to those of global peers. The firm has lengthened the periods it uses to assess fund managers, President Shoichi Ohkoshi said in an interview on Oct. 2. It now uses three-, five- and 10-year periods in its quantitative assessment, instead of one-, three- and five-year periods as it used to do.
Rather than focusing on one-year returns, Nomura wants managers to “have conviction and a style, and take a steady approach to improving performance over the medium to long term,” Ohkoshi said. The change comes as Nomura seeks to strengthen its investment management capabilities as rising interest rates and a booming stock market in Japan create more investment opportunities. When asked if the overall pool of compensation for fund managers will be increased, he said that it would depend on the company’s performance.
The firm oversaw about ¥128 trillion ($809 billion) as of end-June, placing it within the top 50 of global asset managers, according to Ohkoshi. Ohkoshi, a former president and chairman of JPMorgan Asset Management in Japan, is the first Nomura AM president hired from outside the Nomura group since the firm was founded. He said he aims to raise the company’s investment and product capabilities to global standards.
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