By Takeshi Kurihara / Yomiuri Shimbun Staff Writer
Sumitomo Mitsui Trust Group Inc. intends to expand its investments in private assets across Asia, using 500 billion yen allocated through the "strategic investment facility for asset management," a company executive said during an interview with The Yomiuri Shimbun.
The company is considering forming and managing funds for investment in and lending for data centers, infrastructure and other targets in multiple countries. It also intends to focus on decarbonization businesses, a growing investment trend overseas, and enhance its presence across Asia.
The plans were unveiled by Yoshio Hishida, an executive officer of the company and its global asset management officer (GAMO). GAMO is a post the company established last year to oversee its asset management business.
Japan expected to play major role
It has been nearly 20 years since the international organization called Principles for Responsible Investment $(PRI)$ formulated principles that should be held by institutional investors.
"Back in 2006, our company was the only one from Japan to attend the PRI annual meeting in Geneva, but I couldn't adequately answer questions about responsible investment that would lead to addressing social issues," Hishida recalled.
"Since then, I felt this was a theme we needed to seriously engage with, and we have now been working on it for a long time. Tokyo has recently hosted an annual meeting. Hearing the term PRI more often now makes me feel like we have entered a different age," he said.
While environmental, social and governance $(ESG)$ investment has expanded globally in recent years, the surrounding situation is rapidly changing. This is seen in movements such as the United States' decision to withdraw from the Paris Agreement and its negative stance on related issues.
"On such matters as decarbonization efforts, what is important is maintaining a long-term perspective," Hishida said. "As there are many volatile factors, such as geopolitics and political risks, a short-term view can lead investment decisions astray. Our group has established a framework to meet our clients' asset formation needs, with their future outlook taken into account."
Hishida is particularly directing his focus on investments in other Asian countries. Given that Asia accounts for over 40% of global greenhouse gas emissions, he said, "Japan, with its advanced technologies, has a significant role to play."
When addressing social issues, Hishida said the typical approach involves first collaborating with investors to set goals, then working with governments and companies across Asia to advance decarbonization efforts and improve corporate governance. "This isn't just investment; it's interactive support intended for social impact," he stressed.
The company prioritizes private assets, which include renewable energy, infrastructure and private equity, as investment targets. It has already begun exploring the formation and management of funds for investment and lending targeting such areas as data centers and other digital infrastructure.
Hishida also expressed an intention to continue investment in growth sectors such as AI and other technology, defense and space. "Unlike stocks or bonds, private assets offer lower liquidity but greater return stability and social impact. They serve as a suitable option for institutional investors like pension funds," he said.
Utilizing multi-affiliate model
As GAMO, Hishida views the group-wide development of a multi-affiliate model, and collaboration through it, as a strength of the company, as it brings together a diverse range of capable asset management firms and their functions.
Among the group companies, Sumitomo Mitsui Trust Asset Management Co. boasts over 110 trillion yen of assets under management, making it one of Japan's largest. Amova Asset Management Co. -- which changed its name from Nikko Asset Management Co. in September -- excels in product development leveraging its global network. In October, Sumitomo Mitsui Trust Investment Co., which specializes in private assets, expanded its business areas by incorporating some trust bank functions.
Amova Asset Management formed a strategic partnership in Asia with French asset manager Tikehau Capital SCA in 2024. Leveraging Tikehau's expertise enables the group as a whole to offer attractive products to investors in Asia, a key focus region.
"For asset management companies, the people working there are the assets, and generating returns is everything," Hishida said. "Leading an integrated management that leverages each company's strengths is a major mission for me as GAMO. We want to build a common platform that generates group synergies and create mechanisms that allow us to offer a diverse range of options."
Regional revitalization key for Japan
In Japan, the government has been promoting the nation as "a leading asset management center," creating a tailwind for financial investment. The new Nippon Individual Savings Account (NISA) program was launched in 2024. With interest rates normalizing and prices rising, it is becoming harder for individuals to grow their assets only through saving and economizing.
"As investment gains attention, the customer base broadens. This trend likely will continue," Hishida said. But he also referred to a conversation he had with the then Lord Mayor of London in early October, where he was told that although investment had increased in the United Kingdom, funds were flowing overseas where greater growth was expected rather than staying within the nation. "The challenge of how to circulate funds within the domestic market is the same one Japan is facing," Hishida said.
Hishida's views of the Japanese market are thus not necessarily optimistic, but his primary focus, either domestically or internationally, is solving social issues.
"In Japan, regional revitalization is a major theme," Hishida said. "For example, energy is transported from regional sources to densely populated areas such as the Tokyo metropolitan area and the Kansai area. Achieving local production for local consumption would reduce both costs and risks. Creating funding streams to solve social issues like the environment, education and health care is a crucial mission for our group, with its diverse financial structures and schemes."
Sumitomo Mitsui Trust Group celebrated its 100th anniversary in 2024. Hishida takes pride in the group's rare position, as it has services covering the entire investment chain through its full lineup in asset management, asset administration, banking, real estate and more.
"Our greatest strength lies in our independence and comprehensive capabilities as a trust bank group," Hishida stressed. "We have a history of steadily building trust, which is ingrained in our DNA. Asset management should not merely pursue profit but should contribute to society's sustainability. Building trust with investors is essential. We place great importance on fulfilling our responsibility as a trustee holding their assets."
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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November 19, 2025 02:52 ET (07:52 GMT)
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