Japanese asset managers and pension funds share their experiences dealing with one of Japan's most severe natural disasters. Gavin Blair and Raquel Pichardo-Allison report
As Japan faces what Prime Minister Naoto Kan has described as, “the most severe crisis in the past 65 years since the end of World War II,” pension funds and asset managers in Tokyo are doing their utmost to carry on business as usual in a somewhat shell-shocked capital.
“The aim is for normalcy in extraordinary circumstances,” said a source at a major European asset management and investment firm, who declined to be named.
The Friday 11 March temblor, the fourth most powerful ever recorded, shook Tokyo violently at 2.46 pm – just before the Tokyo Stock Exchange closed down for the weekend. Although Japan’s quake-resistant construction technology is the world’s most advanced, being in the high-rise buildings – which house most of Tokyo’s finance companies – during a major tremor can be terrifying. The skyscrapers are designed to roll with the shifting earth, though this does exacerbate the swaying experienced up high.
“After the earthquake the office went straight into our planned contingency operations and everything was checked, from the computer trading systems right through to the staircases,” reported the source from the European firm.
“Almost all of our staff are reporting for duty as usual but the company is trying to show compassion for those that have concerns, especially those with worries regarding their families. We’re being as flexible as possible and allowing people to work from home, or relocate if they really want to – though not that many have yet taken that option.”
The aftermath of the quake and tsunami, particularly the potential nuclear danger, has seen a sizable chunk of Tokyo’s ex-pat population leave town, and set many others on edge. It has also stirred up some controversy between those who are staying and those going. The latter have been labeled ‘flyjin’ – a play on ‘gaijin’, the casual Japanese term for foreigner which literally means ‘outside person’.
“I think there is going to be some awkwardness in the office when and if these guys come back to work. Both with the ex-pat staff who stayed, and the Japanese who think they abandoned both the company and the country,” said a finance sector worker who asked not to be identified. “Those with young children will probably get a pass because everyone understands their nervousness, but the rest are going to have to keep a low profile for a while after they return.”
While some were contemplating escaping or actually doing so, others were busy doing the exact opposite. Charles Beazley, head of International and Institutional Business at Nikko Asset Management in Tokyo, was in Australia when the quake struck, but immediately got on a plane back to Japan when he heard the news.
“I had mounting anxiety and survivor guilt,” said Beazley. However, he was back in time to experience 400 aftershocks, one of which “threw me out of bed”, he said.
Since Tokyo is in a quake zone, every company is used to taking precautions. Nikko AM’s offices have a hard hat and emergency supplies under every desk. Business continuity plans are in place in most companies, said Beazley. Nikko has a remote location some 12 miles away from headquarters that can hold about 150 employees and can keep the company running seamlessly. “We immediately sent a number of our portfolio managers and traders there.”
But Nikko AM staff were back in their 42 floor offices within two and a half hours after the quake had struck. Staff immediately set out to calculate net asset values on their portfolios – by hand – since systems were down. “When our systems were back, we weren’t even one basis point off.”
Nikko’s back office operations are outsourced to a company which did not have to use its backup site, Beazley explained.
There were no members of staff hurt, but everyone has loved ones missing, he said. “On the surface, everyone was fine. But Japan last week lay bleeding.”
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