How to raise capital from Japanese investors?
Like many other countries, there are strict regulations governing the asset management business in Japan. As a general rule, in order to raise funds from Japanese investors, you need to obtain an investment management license from Japan FSA. In order to obtain an investment management license, you need to open an office in Japan and hire a sufficient number of employees including experienced local CEO and compliance officer with whom FSA can be convinced. But before deciding to invest in the Tokyo office, you might want to present your products to investors to see if you can really raise funds from Japan. However, under the regulations, unlicensed foreign investment managers are not even allowed to introduce their investment strategies to investors. There is always a chicken and egg problem here.
But here is a solution!
As mentioned above, foreign investment managers without Japanese licenses are not allowed to raise funds from Japanese investors nor even just introduce their strategies to them. However, there is an exception to the rule: non-licensed asset managers can introduce their investment strategies only to licensed Japanese investment managers or trust banks and manage funds for Japanese investors through them. Many local asset managers are looking for good foreign managers who can re-delegate the management of overseas assets for their institutional clients. Also, many local mutual fund managers are looking for good-performing foreign funds to invest from their local mutual funds for Japanese retail investors. Please see the Japan FSA site for more details on regulations and business schemes.