The Japanese wealth management market is the second-largest in the world behind that of the US. To date, it has been dominated by domestic players and not an easy one for foreign firms to penetrate.

LGT, the Liechtenstein-based private bank, today said that it has opened a new wealth management office in Tokyo after obtaining the necessary regulatory approvals.

The company, LGT Wealth Management Trust Inc. (LGT Japan) located at the Okura Prestige Tower, will cater to Japan’s high net worth individuals and family-owned businesses.

As part of the opening, LGT has appointed Yoshitaka Nagakura, an industry veteran with more than 25 years of experience, as chairman and chief executive for the business. He will report to Dr Henri Leimer, CEO of LGT Private Banking Asia-Pacific.

The company has started operations with an on-the-ground team of more than 35 experienced employees.

While traditionally a tough market for foreign wealth firms to crack, the sheer size and scale of Japan’s market is tempting. Japan is the third-largest economy in the world. Its households own a record of about $18 trillion in assets, but more than half of it is invested in low yielding cash and deposits. In 2020, one out of 40 Japanese was classified as wealthy, which makes it the second-largest market for high net worth individuals after the US.

LGT has been laying the foundations of its Japan business for some time. In April this year, it was reported that Nagakura, a senior private banker at Credit Suisse Group in Tokyo, had left to spearhead a new operation for LGT Private Banking in Japan. A number of other Credit Suisse figures had joined LGT in the country (source: Bloomberg, 28 April). Credit Suisse has itself been one of the more prominent international private banks in Japan. In June 2012, it wrapped up its purchase of HSBC’s private banking business in Japan.

“We have a deep commitment to responsible investing and we see tremendous opportunities to share LGT’s experience in long-term, sustainable investments and wealth management with Japanese clients,” HSH Prince Max von und zu Liechtenstein, chairman LGT, said.

“The traditional Japanese wealth management landscape is changing. We believe that LGT’s expertise in impact and environmental, social, governance (ESG) investing will be of value to Japanese investors. Our team of experienced professionals is looking forward to providing the wealth management service which LGT is known for globally, supported by local knowledge and understanding of our Japanese clients’ needs,” Nagakura said in LGT’s statement.

As at 30 June 2021, LGT managed assets of SFr275.0 billion ($297.4 billion).