Nomura Holdings Expands into Real Estate and Private Assets Amid Rising Interest Rates

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Nomura Holdings Expands into Real Estate and Private Assets Amid Rising Interest Rates

In response to the current economic environment marked by inflation and rising interest rates, Nomura Holdings is intensifying its foray into alternative assets such as real estate and private equity. CEO Kentaro Okuda emphasizes the advantages of diversifying into private assets for investors in such a climate, citing the potential for higher yields compared to traditional stocks and bonds. Nomura Securities, the leading unit of the group, has launched a new private equity fund targeted at Japanese companies aiming to cater to high-net-worth individuals interested in alternative investments.

As some experts anticipate a decline in the attractiveness of alternative investments following the rise in interest rates, Okuda remains steadfast in his belief that real estate and private equity continue to offer viable opportunities. Real estate, in particular, is highlighted as a tangible asset that retains its value during inflationary periods, providing stability and diversification benefits to investors traditionally focused on bonds and equities. Nomura Holdings is bolstering collaboration with its Tokyo-listed affiliate Nomura Real Estate Holdings to tap into the immense interest in real estate assets from Japanese households and overseas investors.

The company's strategic shift towards targeting high-net-worth individuals includes plans to rename its retail division to the wealth management division, showcasing a refined focus on personalized financial services. Nomura Holdings has also ventured into joint fund management with Nomura Real Estate Holdings to optimize its real asset offerings and strengthen its business relationships. Okuda's leadership since 2020 has been marked by a commitment to enhancing business ties and achieving robust financial performance, as seen in the company's decision not to sell its real estate affiliate. The company's initiatives align with the growing interest in wealth creation among Japanese investors, especially after the Nippon Individual Savings Account (NISA) program revamp, which aims to incentivize asset building through tax-exempt investment vehicles.

With a keen eye on boosting financial literacy and encouraging investment over saving, Nomura Holdings plans to offer financial education programs in workplaces and other settings. The company's emphasis on face-to-face client interactions positions it uniquely to provide tailored guidance and support in asset selection. Looking ahead, Okuda remains optimistic about the Japanese equities market, anticipating strong interest from overseas investors due to robust corporate earnings and governance enhancements. He predicts that the Nikkei Stock Average could reach record highs, potentially surpassing the previous peak set in December 1989.