Goldman Sachs to venture into Japan wealth management business

Pedro Gonçalves
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Goldman Sachs to venture into Japan wealth management business

Goldman Sachs plans to start offering wealth management services in Japan, seeking inroads among UHNWIs in a difficult market to break into for overseas financial firms.

The investment bank, which will seek to serve high net worth individuals through its asset management unit, has begun hiring private bankers and is targeting ¥1T ($9bn) assets under management in the next 5-10 years, both Bloomberg and Nikkei reported.

Goldman Sachs is tapping into the opportunities available in Japan, as the country has the third-highest number of millionaires globally after the US and China, according to data from Credit Suisse's 2019 Global Wealth Report.

Goldman will target Japanese clients that own at least 10 billion yen in assets. The clients will be the type that hold corporate status, such as portfolio management firms. Goldman generally will require clients to invest at least 1 billion yen.

Though more Japanese residents are becoming affluent, domestic financial groups such as Nomura Securities and Daiwa Securities Group enjoy a near-oligopoly serving that client base.

Several foreign rivals, namely British banks HSBC and Standard Chartered, pulled out of the wealth business in Japan. UBS last year agreed to merge its Japanese wealth operation into a majority-owned joint venture with Tokyo-based Sumitomo Mitsui Trust Holdings Inc.

The move is part of CEO David Solomon's aim to focus on wealth management and consumer banking to reduce reliance on trading revenue.

 

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