Mamoru Taniya has started a hedge fund and opened an international boarding school. Now the Japanese entrepreneur is turning his attention to robo-advising.
Money Design Co., founded by Taniya three years ago, began a service in February that uses computer algorithms to propose investment plans for individual investors.
Taniya is seeking to increase assets under management for the product, called Theo, to between 200 billion yen ($1.9 billion) and 300 billion yen in the next four years.
Automated investing through so-called robo-advisors was first developed by startups and is now attracting traditional money managers such as Charles Schwab Corp. and Vanguard Group Inc. Taniya wants Japanese households to use their phones to put some of their 1.7 quadrillion yen of financial assets into exchange-traded funds overseas, as a slumping stock market and negative interest rates reduce investment opportunities at home.
“More of Japan’s money should be invested in the world’s economic growth rather than be locked up here in Japan,” Taniya, 53, said in a phone interview. “As a country with a shrinking and aging population, Japan is unlikely to keep pace with global growth in the next 30 to 40 years.”
Dentsu Backing
Money Design completed a 1.5 billion yen round of fundraising in December with investors including trading house Itochu Corp., advertising agency Dentsu Inc.’s venture-capital arm and the University of Tokyo Edge Capital Co. It has hired professionals from companies including Google Inc., Nomura Holdings Inc. and UBS Group AG to increase its staff to 28, Taniya said.
Taniya is using the technology to allow investors, particularly people in their 20s and 30s who have spare cash yet aren’t necessarily wealthy, to diversify their portfolios around the world. The Tokyo-based company plans to introduce a smartphone application for Theo, which has attracted 5,500 users to open accounts through its website since February.
“There’s huge potential demand for robo-advisors from young people in Japan,” Eiichiro Yanagawa, a Tokyo-based senior analyst at research firm Celent, said by phone. “Older generations would ask a brokerage what stocks they should buy, but their sons and daughters are more inclined to depend on technology for their investment decisions.”
Theo allows customers to open an account with a minimum deposit of 100,000 yen ($970) and allocates the funds to a portfolio of ETFs based on a user’s answers to nine questions, according to its website. The service, which charges a 1 percent annual fee, is able to invest in more than 11,000 ETFs in 86 countries and 62 currencies, Taniya said.