There is a Japanese man who works as a private banker for the ultra-wealthy in Hong Kong, one of the world's leading financial hubs. That person is Kenichi Hasegawa, CEO of Wells Global Asset Management Limited. In May 2022, we spoke to Mr. Hasegawa, who has just published ``Textbook on Overseas Investment Learned from the World's Wealthy People'' (published by Fusosha), about the differences in the way of thinking about investment and business succession between Japan and overseas, and about asset management that Japanese people should know. Interviewed. It was an interesting interview, including facts about things that we didn't know much about, such as how the world's wealthy protect their assets and invest.

A Japanese private banker who is well versed in global finance.

First, let's introduce Kenichi Hasegawa's journey as a banker.

Hong Kong is said to be Asia's financial center after New York and London. Mr. Hasegawa, who founded his own financial institution company here and works as an international financial strategist, first set foot in the financial world about 34 years ago. He joined Citibank, America's largest financial institution, as a new graduate, and in 1997 was transferred to the company's headquarters in New York, where he was involved in trading operations for three years.

``Japan's bubble economy was bursting at the time, but at that time, President Clinton was focusing on economic policy, and America was experiencing an extremely strong economy. Risk-taking in the financial markets was also active. In New York, the global financial center, I was able to experience a variety of interesting things as a financial professional, working in the dynamism of moving hundreds of billions of yen, even trillions of yen. That's when I learned about it."

After that, Citibank merged with Travelers Group, and he returned to Japan in 2000. In Japan, he was in charge of product planning and marketing in the private bank division. His track record and skills were recognized, and he transferred to Bank of Tokyo-Mitsubishi (currently Bank of Mitsubishi UFJ), which was trying to focus on marketing at the time.

Although he was experiencing a culture shock due to the Japanese organization and corporate culture he was working for for the first time, he was in charge of everything from marketing to the merger business. As his busy days continued, he realized that what he wanted to do was asset management and private bank work.

“There was also an opportunity within the company to start a global private bank, so we launched a wealth management department in Hong Kong in 2010.”

Later, Mitsubishi UFJ Bank withdrew from this business, but Mr. Hasegawa, who believed in the importance of wealth management, started his own company in Hong Kong and eventually established a bank in Hong Kong in 2015. In 2021, he became independent again and established a financial group including a securities company. As the head of a financial group that provides services to the wealthy, he has earned a great deal of trust from domestic and overseas customers.

“Private banks are financial institutions that provide specialized services to wealthy people who have financial assets above a certain amount.They not only keep customers' financial assets as deposits, but also support asset management, We also build measures and systems to preserve assets and pass them on to the next generation, making full use of our connections in Hong Kong, where it is said that you can find a fund manager at a stone's throw. We provide excavations and services.”

Diversified investment is necessary in uncertain times

When it comes to asset management, Mr. Hasegawa has consistently recommended international diversification of assets.

“At first glance, the asset structure of Japan's wealthy people appears to be diversified investments in financial assets, real estate, etc., but in reality, most of them are domestic assets and assets denominated in Japanese yen. You should be aware that there is a high risk due to the concentration of assets.”

In order to avoid such excessive concentration risk, what is needed is diversified investment that is not biased towards specific countries or products. It is true that the future of the world is uncertain, such as COVID-19, Russia's invasion of Ukraine, and the current unstoppable depreciation of the yen and inflation, and many unexpected situations will occur. This is a method that everyone should be aware of, even if they are not super wealthy.

“Americans also generally invest in domestic stocks and bonds.However, many major American companies have global business operations, so even if they invest in domestic products, , which naturally leads to internationally diversified investments.Also, wealthy people in Asia recognize that their countries' economies are small, so they are considering geographically diversifying their investments.

Leveraging the advantages of Hong Kong, Asia's premier financial center

The focus here is on the merits of Hong Kong, which has a high degree of financial freedom.

“Unlike Japan, where there are many regulations in the onshore market, in Hong Kong, world-standard rules are applied, regulations are easy to understand, and we can provide a wide range of financial products. Of course, you cannot purchase overseas financial products in Japan. However, these are only those that are developed under Japanese regulations.In Hong Kong, there are funds that offer investment opportunities not only in the United States and Europe, but also in Central Asia, which is said to be the frontier of Asia. You can choose and purchase what suits you and what you like from the lineup of financial products inside.

Regarding Hong Kong, many Japanese people feel uneasy about it being part of China, but they say there are also many misunderstandings.

``It is true that mainland China has various restrictions on the movement of people, goods, and money, but in Hong Kong, people can move freely and exchange information is free, and the restrictions applied between the mainland and Hong Kong have no sense of level. It is based on the idea of ​​separating politics and economics, where politics is politics and economics is economics.

In particular, one major difference from the mainland is the movement of money. ``For example, even if a Japanese person invests in China successfully and makes a profit and wants to withdraw, each person can only take out 1 US dollars (approximately 5 million yen) from China. You need permission to transfer money, and basically you are not allowed to transfer assets. However, in Hong Kong, there are no restrictions on transferring even 700 billion yen or 10 billion yen. there is no"

Mr. Hasegawa believes that Hong Kong's degree of freedom will be ensured in the future as well. ``If Hong Kong were to become as harsh as the mainland, there would be no reason for Hong Kong to exist at that moment.Hong Kong's wealth would be greatly diminished.The person who would lose the most would be none other than China. It is very important for China that Hong Kong continues to function as it currently does as an access point to free markets."

Incidentally, Singapore comes up in conversation when talking about Asian financial markets, but its market size is not comparable.

"The total market capitalization of Hong Kong's stock exchange is almost the same as that of the Tokyo Stock Exchange. Singapore's, on the other hand, is only about one-fifth of Hong Kong's. In terms of daily transactions, Singapore is still as large as Vietnam or Jakarta. It's true that Hong Kong has a tremendous advantage when it comes to access to financial markets."

Successful asset inheritance that protects and inherits assets

Another issue that the wealthy worry about is inheritance of assets. Particularly in Japan, where inheritance taxes are high, there are many cases where the saying that a family will go bankrupt if the inheritance continues for three generations comes true.

“The world's ultra-high-net-worth individuals do not own assets in their own names or company names.Most of them use trusts and foundations. It is used by wealthy people.”

In Japan, trust banks and other similar services are provided by trusts, but the content is quite different. Of course, there are similarities, such as the point that the settlor entrusts its assets to the trustee, and the trustee invests them in stocks and bonds to reflect the settlor's will, and the settlor entrusts the assets to the settlor. There are many similarities, such as disbursing economic benefits to people.

There are various cases of trusts, but basically a trust is established by entrusting assets to a trust bank. A system that allows a designated person to receive profits from the operations of an asset management company established under the trust. Although they do not own the assets, they can earn appropriate and stable profits by controlling the trust itself.

``There are various other means of defense, but unfortunately Japan's wealthy are slow to take such measures.However, the ultra-rich who know how to do so will definitely protect their assets and businesses and protect their future generations.'' I am preparing to pass it on to

Not knowing the world's financial know-how will not only prevent you from increasing your assets, but also cause you to lose important business. As a Japanese person, Mr. Hasegawa will guide us in what we can do to achieve this goal.

"Wealthy people around the world, especially in Asia, are very conscious of the importance of protecting their assets. There are many ways to do so. I hope that Japanese people will do the same."

Mr. Hasegawa would like to continue to communicate the usefulness of internationally diversified investment using Hong Kong as a gateway through seminars and other activities. Actively protect and increase your assets. I think he should understand the world of finance for himself and make use of it for tomorrow.

Kenichi Hasegawa

Graduated from Kyoto University Faculty of Law and Kobe University Master of Business Administration (MBA). After holding key positions in the financial securities department at Citibank's Tokyo branch and New York head office, he worked in the retail and private banking departments. In 2004, he moved to the Bank of Tokyo-Mitsubishi (currently Mitsubishi UFJ Bank), where he was responsible for marketing in the retail division and wealth management business strategy in the international division, before launching the business in Hong Kong in 2010. In 2015, he founded Nippon Wealth Limited, a bank specializing in asset management. In 2021, he became independent again and established Wells Global Asset Management Limited (SFC CE: BS1009). It has obtained a securities business and investment license from the Hong Kong SFC and provides services to wealthy individuals.