Goldman Sachs Asset Management to provide an “Outsourced Chief Investment Officer”

The Nikkei reported this week that Goldman Sachs, through its asset management division Goldman Sachs Asset Management (GSAM), is launching a business called OCIO (Outsourced Chief Investment Officer), and would offer this service first to pension funds of subsidiaries of foreign companies in October, and then will expand the customer base to include institutions such as foundations, medical corporations, and educational institutions.

GS’ Strategy for its Asset Management Business in Japan

Actually, in January of this year, Goldman Sachs had published a note on its asset management business in Japan, and laid out the following strategy:

Goldman Sachs Asset Management (“GSAM”) has over 2,500 employees, with around 60 locations worldwide, and provides asset management and investment advisory services across various countries and regions. Since the establishment of an investment advisor company in 1990, Japan has been one of its key locations, and has contributed to the growth of Japan’s asset management business by providing world-class asset management services to Japanese institutions, financial advisors and individuals. GSAM leverages Goldman Sachs’ extensive resources in the global financial market, risk management capabilities, and advanced technology substrate to provide investors with optimal solutions. GSAM aims to provide high-quality investment opportunities and services to meet diverse asset management needs in today’s rapidly changing market, with a wide range of investment targets including traditional assets such as equities, bonds, and money markets, and alternative assets such as real estate investment and private debt and equity

Initiatives toward Enhancing Asset Management Business in Japan

Provide world-class globally diversified investment opportunities to Japanese institutional and retail investors

GSAM will leverage GS’ global network and expertise in order to provide diversified funds that benefit long-term investment. GSAM is aiming to enhance its product lineup to meet investor needs through a wide range of investment styles, regions, and management methods.

Provide highly specialized investment products, including alternative assets

GSAM offers opportunities to invest in traditional assets such as public equities and bonds, which account for the majority of investors’ investment portfolios, as well as alternative assets with different risk-return characteristics. GSAM leverages GS’ extensive global network to provide investment opportunities for alternative investment professionals.

Commitment to stewardship responsibility

GSAM is committed to fulfilling its stewardship responsibilities as an institutional investor through responsible investment. GSAM aims to support appropriate actions that contribute to the value enhancement of investee companies and issuers through constructive dialogue engagement, the exercise of shareholder voting rights in equity investments and other initiatives. GSAM also works to contribute to the realization of a virtuous cycle of sustainable growth in investment and improved investor returns.

OCIO Services for the Japanese market

Adoption of an OCIO (Outsourced Chief Investment Officer) services is progressing among European and US corporate pensions, in order to advance investment strategies and structure, improve governance, and advance disclosure. GSAM is the largest provider of OCIO services in the US, and has long been well positioned to meet corporate pensions’ and other clients’ varying asset management needs since the establishment of a Multi-Asset Solutions Group in 1995. GSAM leverages its global experience and expertise to promote OCIO services in Japan.

Transition to the single Net Asset Value (NAV) calculation

GSAM has been actively working to advance the industry’s transition to a single NAV calculation for mutual trusts as part of global standardization efforts. To this end, GSAM has led discussions across the industry including dialogue with government authorities and the Investment Trusts Association of Japan, participation in review meetings, and the introduction of pilot tests. The implementation of a single NAV calculation would help to streamline mutual fund back-office operations and management and bring the Japanese industry in line with global standards, enabling investors to access a wider variety of products. In addition, GSAM participates in pilot testing on the digitization of delivery prospectuses, and has been striving to streamline processes and realize clear disclosures.

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