Nikko AM sees assets tripling in four years

By Emi Emoto and Brian Kelleher

TOKYO (Reuters) - Nikko Asset Management expects its assets to triple to 30 trillion yen ($250 billion) in four years in Japan's booming investment market and is readying itself for an initial public offering in the next six months.

Nikko AM, majority-owned by No. 3 brokerage Nikko Cordial Corp. 8603.T, expects about 300 trillion to 500 trillion yen to flow from savings to mutual fund products in the next four to six years, Chief Executive Tim McCarthy told the Reuters Wealth Management Summit.

"We snag about 10 to 15 percent of that net flow right now," he said. "You're not going to find another pool of money like that moving into risk products anywhere else in the world."

Even if the stock market tanks, the firm should be able to double its assets, said McCarthy, the former president of U.S. brokerage giant Charles Schwab Corp. (SCHW.O: Quote, Profile, Research, Stock Buzz).

McCarthy expected two-thirds of the investment flood to pour into bonds and one-third into equities as most of the money comes from older, conservative investors. A lot could go abroad, he said, adding that at least half of Nikko AM current assets are invested overseas.

Investment trusts have jumped in popularity in recent years but still account for only about 3 percent of Japanese household assets, compared with about 14-20 percent in the West.

"The difference in Japan is that the money has not yet moved," he said.

McCarthy has run Nikko AM since March 2004 and has overseen a doubling of assets under management to 10 trillion yen.  Continued...