Nikko Capital Management (U.S.A.) Inc. is stressing its global reach, rather than its Japanese origins, as it attempts to build marketshare in the U.S. tax-exempt market.
The New York-based money manager, a wholly owned subsidiary of Nikko International Capital Management Co. Ltd., Tokyo, is marketing its U.S. capabilities and its local management. It plans to launch global and U.S. fixed-income products within the next six months.
Nikko USA and its sister company, Nikko Capital Management (U.K.), both recently promoted local executives to head their operations. Nikko USA named Stanley Kirtman as its new president, replacing Chairman and President Shigekazu Kurishima, who is returning to Japan to assume other duties. Mr. Kirtman was previously chief investment officer; he will retain that title. Takao Nakanishi, the president of Nikko International Capital Management Co. Ltd. the firm's parent, will assume the title of chairman of Nikko USA, but will remain based in Tokyo. Additionally, Nikko U.K. promoted David Somers from portfolio manager to managing director, heading daily operations of the London-based group, a responsibility previously held by Takashi Murakami, who remains as chairman and president of Nikko U.K.
The parent company is casting itself as a more global asset manager, rather than a manager of Japanese assets overseas, although Japanese assets still make up 60% of its $17.4 billion total assets.
Nikko International has been hiring local investment expertise in its five offices outside of Japan - New York, London, Hong Kong, Singapore and Guernsey - and now it is time for those local professionals to take over management from the Japanese staff, said Mr. Kurishima.
Nikko USA has had limited success in attracting U.S. assets, in part because it is perceived strictly as a Japanese firm, an image that obscures its domestic management capabilities, said Joseph Brunken, vice president in charge of marketing.
The U.S. office, which opened in 1981, has $800 million in assets under management, of which only $200 million is for U.S. institutional clients, and that is all in non-U.S. investments, said Mr. Brunken. He added Nikko USA recently selected to offer a domestic equity option for the 401(k) plan of its sister company Nikko Securities.
Nikko USA wants to be known as a U.S. company owned by a Japanese company, not as a Japanese company that happens to do business in the United States, said Mr. Kirtman. He added the domestic equity product has shown good performance recently, which should help. Nikko USA's U.S. equity strategy, started in 1988, reports annualized returns of 16.7% since inception, compared to 14.4% for the Standard & Poor's 500 Stock Index. During the second quarter of 1995, it returned 12.5%, compared to 9.6% for the S&P 500. Its cumulative returns since inception are 183.3%, compared to 147.7% for the S&P 500.
During the next six months, Nikko USA is planning to add domestic fixed-income and global fixed-income products made up of high-quality government and corporate debt, according to Mr. Brunken.
Approximately nine months ago, Nikko USA hired Clifford Stober, a fixed-income portfolio manager from Haven Capital Management, Inc., New York, to manage fixed-income investments and he now has $300 million under management for non-U.S. clients, he said.