Building a framework for individual investors in Japan: An interview with Tetsuya Koizumi, president of Capital International K.K. and head of the Asia-Pacific Client Group at Capital Group.

Heidrick & Struggles’ Sari Hattanda speaks to Tetsuya Koizumi about his efforts to enrich the lives of Japanese people through habitual investing. 

Sari: You started your career with Nippon Life Insurance as a new graduate hire, then transitioned to global asset management. Most recently, you decided to join Capital Group. Could you share why? 

Tetsuya: About 30 years ago, when I was working for a US subsidiary of Nippon Life, one of the first trusts I invested in was from Capital Group. I bought the fund without any prior knowledge, and you never know what will happen in life – I subsequently encountered the asset management business through the defined contribution (DC) pension business that I was involved in in the US. Seeing ordinary people preparing for a happy retirement through investment, I strongly felt that this should become the norm in Japan as well.

During this time, I was based in Chicago and my experience working with local employees inspired me to work at global investment management companies.

Approximately 70% of Capital Group's assets under management are in tax-exempt systems aimed at long-term asset formation, such as individual retirement accounts (IRAs) and 401(k) defined contribution pension plans. We have a strong reputation for our 401(k) plans for small and medium-sized enterprises. We are highly regarded as a leading asset management company with a large market share. With this track record of contributing to the rise in investments among ordinary workers in the US, I believe that Capital can help the people of Japan live a richer life. 

Sari: What experience helped you achieve your current accomplishments, and what factors do you think have led you to success?

Tetsuya: My involvement in the asset management business in the US, where it is widely embraced by the public, has greatly influenced how I operate our business. In Japan, investment is becoming more common through the expansion of the NISA and iDeCo (Individual-type Defined Contribution Pension Plan) systems. I noticed that investing is considered part of everyday life in the US and my experience and observations there inspired me to think about what is needed to promote investing in Japan, and how we can contribute as an asset management company.

In terms of managing a firm, having the opportunity to talk with senior business leaders from a young age was an important experience. For example, I first met Tadashi Yanai of Fast Retailing more than 15 years ago, when he was focusing on overseas expansion. I was inspired by his ambitious goals and the high-quality products and services that he was promoting globally. At Capital, we are working hard every day to become a model company, not only in the financial industry, but across all industries, by providing the best quality products and services.

Sari: Since last year, you have also been leading the APAC region. It is still uncommon to find a Japanese person in such a high position in this industry. Could you share your key achievements and challenges in managing the region?

Tetsuya: Fortunately, our corporate culture is very strong, which minimizes difficulties from cultural gaps between countries. One of the challenges is the need to make decisions based on data for markets I am not familiar with. Since the market environment of each country is different, so it takes me longer to develop strategies for the business in those markets. I go on business trips regularly and so I have been allocating 50% of my time to Japan and 50% to APAC. I am fortunate to receive support from the strong local leaders, which compensates for my lack of on ground experience. I am passionate about listening to each country’s leaders, aligning our perspectives as a region, and collaborating as one team to achieve our goals. Moreover, I enjoy learning about the Asian markets and channeling my ideas into strategy. I believe the way to manage a business is the same no matter whether it is in Japan, APAC, or globally. It is important to create an environment where each associate can work comfortably, have a clear vision and understanding of the direction of the business, and communicate frequently. 

Sari: Do you have any advice for those aspiring to become a Japan country head like you, or a leader for the APAC region?

Tetsuya: One key responsibility as a president is to set a clear direction and vision for the company. You must have a long-term view of the business, the industry, and society, determine the company’s direction, and start planting the seeds. You have to think about things that other members do not think about, and sometimes make proposals that may seem outlandish to associates, to move the business forward. I encourage aspiring leaders to adopt this mindset, rather than focusing solely on the work in front of them. If possible, discuss such perspectives and mindset with your manager or firm’s president.

I have gathered associates to form a team to envision what kind of financial services will be in demand to benefit investors in Japan the next 30 years, and the potential role our firm in that landscape. I do not believe there are many opportunities to think about such things in your daily work, but contemplating these issues may lead to new insights and broaden your perspective. 

Sari: How do you manage expectations from the US headquarters? What are your thoughts on hiring and strengthening your team?

Tetsuya: Our business in APAC is gaining momentum, growing, and therefore attracting global attention. Japan is the second largest market after the US, and APAC is also expected to grow — so it is a great opportunity to strengthen our regional team. Last year, our Tokyo office introduced Capital Learning, an educational training system for Japanese financial advisors and financial institutions to support customers' lifelong asset formation. The system was developed in the US, where financial advisors typically help customers achieve long-term financial goals. We also need talent with different skills because we are planning to develop services that are not available elsewhere in the world. Our goal is to increase the number of team members who share our philosophy of "enriching the lives of Japanese through asset management services" and create a stronger team than ever.

We also like to rotate team members within APAC. We believe that enabling associates from different offices work together in person helps facilitate knowledge sharing across countries and strengthen teamwork. In terms of managing expectations from headquarters, we align our plans for the next year through both bottom-up and top-down approaches every year, separate from long-term plans. I also produce a monthly newsletter which I send to the management team at the headquarters.

Sari: We first met through equestrian competitions outside of work, and we share a strong passion for show jumping. You are a former vice captain of the Varsity Keio University equestrian team, currently train under an Olympian and compete alongside professionals in the All-Japan Championships as one of the few amateur athletes with a full-time career. Can you please tell us how you balance your work and personal life?

Tetsuya: I began show jumping in junior high school and whenever possible, I practice on weekends. I participate in competitions regularly to qualify for the All-Japan Championships this November. I believe that the most important thing in equestrian sports is to build a good partnership with your horse and to always engage non-verbally with it so that your horse remains calm when competing. When I ride my horse, I switch my mind off from work which allows me to reenergize. On weekdays, I do yoga and training in the morning to refresh myself before starting work.

Given our close interactions with the US and Europe, we occasionally attend meetings at irregular hours. However, the idea of DE&I is widespread in our firm, so meetings are rarely scheduled only at times that are convenient for the US headquarters. Meetings are held in two parts to make it easier for APAC members to participate, and the time zones are adjusted, creating an atmosphere that respects the work-life balance of individuals, regardless of their office location. I also try to take vacations such as summer holidays to set an example for my associates.

Sari: Could you tell us your future goals and challenges?

Tetsuya: We will continue our efforts to make asset management and investment a part of life in Japan. It is important to enable everyone to live a happier life through investment. I believe there are three important things to establish for long-term continuous investment in Japan. 

The first is to create a system that facilitates automatic savings. For example, through corporate or individual DC, and NISA, money can be automatically saved every month, and DC cannot be withdrawn until age 60, so it allows long-term asset formation.

The second is to give the younger generation an opportunity to think about finance. Retirement is still a long way off for them, but it is important to get them to think about the kind of life they want to live and to learn how managing their finances actively can help achieve their dreams as early as possible. 

The third is the development of financial advisors, as mentioned earlier. When the market crashes, like it has recently, everyone becomes anxious. At such times, we need professionals who can advise us on the importance of staying in the market and continuing to invest. We would like to increase the number of such advisors in Japan. As market conditions differ from country to country across APAC, it is not possible to generalize the strategies. Instead, by developing investment strategies tailored for each country, we will expand our business to help more people live happier lives through investing.