Babson Capital Management is applying for a license to operate locally in Japan, in response to growing opportunities there, said CEO and President William F. Glavin. "We've seen increased demand from large, sophisticated Japanese investors for many of our alternative strategies," including LIBOR-based bank loan strategies and CDOs and CLOs, Mr. Glavin said in a telephone interview. "A local license will allow us to capture a larger share of the market." Parent company Massachusetts Mutual Life Insurance's Tokyo-based asset management unit, MassMutual Investment Management, hopes to obtain the license during the first quarter of 2006, said Mr. Glavin.
Currently, Japanese clients set up offshore trusts that hire Babson as an adviser. The amount Babson advises for Japanese clients has quadrupled over the past two years to more than $2 billion, said Arthur Djang, who heads up international insurance investments at Babson. A local license would allow MassMutual Investment Management and Babson to more easily serve Japanese pension funds and other institutional investors, which face some restrictions in hiring non-licensed managers.
A local license would also lift restrictions on how much general account money Babson can advise in any one portfolio at the parent company's local life insurance unit, MassMutual Japan, Mr. Djang said.