April 14, 2026 — The adoption of Japan’s Asset Owner Principles could trigger shifts in the country’s asset management industry, including a possible surge in demand for outsourced chief investment officer services (OCIO) among pension funds and other institutions.

The government of Japan established the Asset Owner Principles in 2024 as part of its broader set of investment, governance and risk management reforms aimed at improving institutional investment outcomes, enhancing long-term investment returns for savers and strengthening the country’s capital markets.
By encouraging asset owners to tighten governance policies and adopt best practices in investments and other areas, the Principles could eventually spur dramatic changes in institutional investment operations, portfolio allocations and asset manager rosters.

“Professionalizing investment operations and modernizing portfolios according to the guidelines laid out in the Principles will increase complexity,” says Tomomi Shige, Head of Investment Management—Japan at Crisil Coalition Greenwich and coauthor of Asset Owner Principles could push Japanese institutions to OCIO. “Many asset owners, especially smaller institutions, will struggle to marshal the expertise and resources required to operate in this new environment.”

Potential surge in demand for OCIO
For some institutions, the answer might be OCIO. Currently, only about 3% of Japanese institutions use an OCIO manager, according to the results of the Coalition Greenwich Voice of Client – 2026 Japanese Institutional Investors Study. That usage rate is far lower than that found in other institutional markets. For example, over 20% of U.K. institutions use an OCIO manager, as do 16% of U.S. institutions.

“If implementing the Principles brought Japan’s usage to levels comparable with these markets, that shift alone would drive huge growth in OCIO,” says Crisil Coalition Greenwich Global Co-Head of Investment Management, Parijat Banerjee.

Broader changes to the asset management landscape
Adoption of the Principles could have other widespread ramifications for the Japanese investment management industry. For example, asset owners looking to diversify portfolios might become more open to working with foreign managers and with specialists in private assets, real estate and alternatives. 
Increased adoption of OCIO by Japanese asset owners could also have an impact on asset management fees. The entry of OCIO managers would mean more competition for institutional mandates, which could drive down fees. It could also force some managers to discount fees as they are displaced from traditional mandates and instead take on sub-advisory roles for OCIO managers.

To compete in this new environment, both domestic and foreign asset managers will have to adjust their strategies—a process already underway in the form of new partnerships and extensions of existing OCIO offerings.

As Tomomi Shige concludes, “With government reforms pushing asset owners away from traditional approaches and toward more professionalized and formalized OCIO arrangements, it will be interesting to watch the evolution of the market in the coming months and years to see who comes out on top: trust banks who already have incumbent partnerships with Japanese asset owners, consultants who see OCIO as a way to expand their franchises with high-margin business, or asset managers looking to protect, and hopefully grow, AUM and revenue bases.”