Financial Sector

November 2004

ABN Amro Holding NV will launch an asset-liability management advisory business catering to Japanese insurance firms and pension funds. The Dutch financial group intends to form a designated team in Tokyo. With the aging of the society, ABN Amro believes that demand for safe and efficient management of pension assets will grow in Japan. Although Japanese insurance policies generally have long liabilities, assets are usually invested in five-year bonds. Mistakes could result in a large negative spread, undermining profitability. ABN Amro plans to help Japanese insurers and pension funds avoid such pitfalls by advising them on proper risk management skills, including bond issuances and derivatives investments, and on targeting returns. The group is also looking to strengthen business related to foreign exchange and similar operations in Japan. The marketing of hedge funds and other products will be bolstered as well amid growing interest in alternative investments. (November 17, the Nikkei Financial Daily)