Benefits and Potentials of Crossover Investing

For asset managers in APAC, Mr. Takashi Maruyama, Senior Advisor of FIL Investments (Japan) Limited, shares his expertise on crossover investing by publicly offered investment trusts.

Introduction

Asset management firms in APAC can learn from front runners in crossover investing in Europe and the United States. In order to share an adoptable framework of crossover investing with asset managers in APAC, this article summarizes an hour-long interview with Mr. Takashi Maruyama, Senior Advisor of FIL Investments (Japan) Limited on crossover investing. Japan-specific examples in this article are provided to help asset managers find their equivalents in the country/region they cover. 

In Europe and the United States, asset management firms that invest mainly in listed companies are investing more in unlisted companies both in and outside their countries. For example, T. Row Price invested in Tokyo and Singapore-based Sansan in its Series E in 2018, and Sansan went public in 2019. To seize similar opportunities, Japanese asset management firms are now starting to follow the footsteps of European and American firms. In January 2021, Nomura Holdings, Inc. and SPARX Group Co., Ltd. announced that they had agreed on a strategic partnership to launch an asset
management firm investing in unlisted companies. 

As an expert in crossover investing, Mr. Maruyama has generously walked us through the benefits of crossover investing and what is required for this kind of investing to become a common practice in Japan. Mr. Maruyama is also a roundtable member of the Japan Securities Dealers Association, a self-regulatory organization serving an interlocutor for the securities industry in Japan. In April 2021, at the fourth session of the "Roundtable Discussion on Revitalizing the Issuance and Secondary Market for Unlisted Stocks," he delivered a presentation on investing in unlisted companies by asset management firms. Based on the interview, this article focuses on crossover investing by publicly offered investment trusts.