Pimco Sales in Japan

Newport Beach-based Pimco Advisors Holdings LP, one of the biggest listed U.S.-based fund managers, hopes to attract $1 billion from Japanese individuals and companies by the end of its first year in Japan.

It’s off to a good start. Pimco’s Total Return Fund, the largest fixed-income mutual fund in the world, has garnered $307 million since Nikko Securities Co. began selling the fund in late July. Pimco plans to start directly managing corporate pension funds and other institutional money next year.

Many of the biggest names in asset management--Merrill Lynch & Co., Fidelity Investments, Dresdner Bank AG and UBS--are racing to expand their businesses in Japan to grab a slice of the assets held by Japanese individuals. Foreign-owned companies also are making inroads into Japan’s pension management industry as a result of country’s “Big Bang” financial reforms.

“Japan is a terrific opportunity for Pimco given its high savings rates, demographics and the current deregulation,” said William Thompson, chief executive officer of Pimco.

Pimco manages about $230 billion in assets, over half of which are invested in bonds. The company plans to introduce more of its bond funds to Japan and may introduce equity funds through its subsidiary, Oppenheimer Capital, which will set up shop in Japan later this year.

The Newport Beach-based company is in negotiations with major Japanese banks and other financial companies about selling its funds in Japan. Regulations preventing Japanese banks and insurers from peddling mutual funds will be lifted Dec. 1.

Thompson said worries about deflation and the volatility of stocks worldwide should help boost demand for its bond funds in Japan.