FinCity.tokyo

Diversifying Japan’s asset management industry through the Emerging Managers Program (EMP)

The Emerging Managers Program (EMP) operated and promoted by FinCity.Tokyo is an innovative initiative aimed at supporting the market entry of a wide variety of asset management firms. The programme is now attracting attention as a key initiative to revitalize Japan’s asset management ecosystem. Shotaro Murai and Misaki Shoji, project managers at FinCity.Tokyo, give us the details.

―What is FinCity.Tokyo’s Emerging Managers Program (EMP)?

Murai:

Since its establishment in 2019, FinCity.Tokyo has been working with the Tokyo Metropolitan Government to promote the EMP. The programme aims to encourage market entry for emerging managers (EM) based in Japan and promote innovation and diversity in investment finance through capital supply from asset owners *(AOs) and major financial institutions**.

Although the term “emerging” is used here, we are talking about professionals who have a track record at asset management companies over many years and have independently started their own businesses using their own funds. Therefore, compared to major asset management companies, they are not tied down by relationships with sales companies and can be expected to operate in a way that is more aligned with the interests of fund providers. In addition, the relatively small size of these organizations means there are few personnel transfers, which gives them the advantage of building medium- to long-term relationships with investee companies.

Given this background, since 2019, FinCity.Tokyo has been working to promote the EMP by disseminating information on cutting-edge initiatives in Japan and overseas, as well as the actual activities of EMs, with the aim of spreading understanding of the significance and potential of investing in EMs among a range of stakeholders.

Alongside FinCity.Tokyo’s activities, in December 2023, the Cabinet Secretariat and the Financial Services Agency formulated the “Policy Plan for the Realization of an Asset Management Nation.” This plan proposed the creation of an environment to encourage domestic AOs and major financial institutions to supply funds to EMs in a Japanese version of an EMP. Currently, domestic AOs and major financial institutions are moving forward in earnest with their own EMP initiatives in line with this plan.

Shoji:

Many EMs have made the independent move from major financial groups, driven by a strong desire to pursue their own management styles and provide independent advice to clients. The EMP also has the added benefit of promoting the diversification of growth capital by facilitating investment in newly listed companies and small cap stocks, which are structurally difficult for large companies to invest in. In this way, the programme provides a nimble perspective not seen before in Japan.

―Why is this program so important in Japan?

Murai:

Overseas, it’s common practice for AOs to compete to invest in EMs to secure capacity and future growth opportunities. This competition leads to innovation in financial investment. In Japan, however, AOs are often restricted by formal criteria such as minimum length of track record or asset size after independence, making it hard to invest in EMs.

FinCity.Tokyo has extensive connections with overseas AOs. This means we are able to share insights of how overseas AOs think and operate with their Japanese counterparts, so that Japanese AOs do not miss out on opportunities or fail to renew their portfolios due an inability to allocate funds to into EMs.

―What concrete support does the program offer?

Shoji , Murai:

Main offerings include:

• Tokyo Asset Management Forum (TAMF)
  An open conference in Japan for AOs and large financial institutions highlighting the importance of EMs. Previous forums featured Financial Services Agency officials discussing EM policies and case studies from overseas AOs. Anyone interested is welcome to participate.
• Overseas AO survey and matching between overseas AOs and EMs
  We regularly survey overseas AOs to understand how much they actually invest in EMs, and provide matching opportunities for Japanese EMs that attract AO interest through this survey. FinCity.Tokyo maintains a dedicated database that is updated by the EMs themselves and to which eligible AOs are granted access.
• EM Showcase
  Launched in 2023, this initiative publicly features a snapshot of the EM ecosystem, wherein EMs are selected based on criteria set by FinCity.Tokyo including distinctive management approaches or investment philosophies, or business models that are new to the industry. 15 companies were selected in fiscal 2023 and 25 in fiscal 2024. The selection committee includes major Japanese asset management firms and AOs. As the first case in utilizing the EM Showcase, Japan Post Insurance and Daiwa Securities Group Inc. invested in Kadira Capital Management, one of the selected EMs, in March 2025.
• Independent Launch Seminar
  A seminar for aspiring “future EMs.” Senior EMs share their experiences starting up their own businesses, while experts provide practical advice on asset management license acquisition procedures, tax and compliance issues. The event is open to anyone seeking to become an EM.

Shoji:

If you’re interested in the EMP, our office can arrange a meeting to explain how we might support you and connect you with the most suitable program. Please contact us.

―Do you have a final message to companies considering the EMP?

Murai:

I feel that Japan has finally taken its first steps in EMP-related initiatives. EMs are highly ambitious players who have chosen to invest their own capital and become independent in the Japanese market.

The essence of the EMP is not to generate change on the EMs side but rather lead to a transformation in investment behavior in which AOs, which provide funds, take a step forward and reconsider their methods of capital allocation.
Longer term, we would be pleased to see Japanese EMs receive greater attention as drivers of future growth opportunities.

Shoji:

Japan’s industry environment and regulations are gradually moving closer to global standards. The Japanese EMP is part of this trend. We would like to encourage domestic AOs and major financial institutions to take note of FinCity.Tokyo’s EMP. We are also looking forward to receiving inquiries from EMs who wish to be matched with AOs.

 

*Asset owners: Pension funds, mutual aid associations, insurance companies, university endowments, etc. **Financial institutions: Bank groups, securities groups, asset management companies, etc.