I felt so small, waiting in the reception area of a global alternative investment firm. The office was in a big building standing in a prestigious area in Tokyo. For this important meeting, I even practiced how to bow properly. I felt nervous. I was going to meet a Media Relations Manager—what an intimidating title! After a while, she showed up. Looking at my business card, she said, "So, you are a translator specialized in alternative investment. Well, what is alternative investment?"
Alternative investment is
a mystery in Japan
The above is a true story. Alternative investment is a mystery in Japan because documents are hidden from the public, textbooks on the subject are not available, and university programs focused on private equity—like INSEAD’s Global Private Equity Initiative—do not exist in this country. Yet another reason for the lack of knowledge is the language barrier.
English is an Achilles' heel of
Alternative investment is mostly an American invention. You need to know English to know alternative investment. But the general level of English of Japanese people is not high enough to understand its intricacies.
The table below shows the average level of English proficiency in Asia.
Very high and high
Malaysia, Philippines, Singapore
China, Hong Kong, India, Macau, South Korea, Taiwan
Low and very low
Afghanistan, Bangladesh, Cambodia, Indonesia, Japan
Kazakhstan, Kyrgyzstan, Maldives, Mongolia, Myanmar, Nepal
Pakistan, Sri Lanka, Thailand, Uzbekistan, Vietnam
Source: EF Education First. In 2019.
So, they are in the dark
Their lack of knowledge in English and alternative investment does not stop the Japanese investors from wanting to know more. But even the local distributors of overseas fund managers do not have access to information. I heard a complaint that when distributors ask questions to overseas fund managers, no response comes back. That is no way to satisfy clients.
Why does all this matter to you?
Investors start asking questions when performance is suffering. You can generate goodwill by answering their questions. Attaching a Japanese translation would be even better.
English documents, such as notice of capital call, notice of distribution, and capital account statement, can be difficult to understand for Japanese investors.
Yes, translation fees will add to the administrative cost. But this is one way to make you look serious about building a relationship, show respect, and keep LPs on your side.
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Lisa Hew, Principal, Belle Translation Japan