Japan is a parallel universe. Whenever I travel to Tokyo (or when clients from Tokyo visit us in New York), I am amazed to how completely different Japan is – always extremes, never middle of the road.

Anyone that has spent time in Tokyo and the rest of Japan knows the feeling. Finding a building? Well, yes, there are no English signs or anyone that can or is willing to speak English, which can make things slightly complicated when you are running late for a meeting with the board. But that’s the easy part.

House numbering is where the real fun begins. Japan divides the city into small sections, each with its own numeric code. If that confuses you, that’s only the beginning – the houses within each zone are labelled based on either the order in which they were constructed or clockwise around the block. Got it?

Good luck.

Once you are in the meeting, you of course better understand the very different business etiquette, appropriate use of hands, cadence, and the fun of using translators.

Anyway, a long intro to why Japan is bringing you a slice of the future for asset management. For me, Japan has been the most interesting case study of distribution, sales and product innovation in recent years (and I’m not even going to get into issues such as baby-mother structures, the post, income demand or retirement).

Let’s take Nomura as a case study.

In 2005 and 2006, 90% of all products in Japan were sold via banks, and the products almost always had a track record of at least one year and a focus on multi-asset class diversification. Nomura successfully sold “MyStory” during that time and the fund at some point used some twenty sub-advisors and had $20 billion in AUM.

Then the crisis happened and Japan flipped the switch. Investors lost significantly, and the response was to tell them they should increase their risk appetite to win back some of the losses (sic).

So distribution turned upside down. Now securities houses sold 90% of mutual funds and almost all of them had no track record, i.e. new funds with exotic themes to tell an interesting story.

One such story in 2009 was US yields mixed with a basket of currencies. Nomura sold many billion dollars of its US High Yield fund, primarily the share class linked to the Brazilian real. Yes, Sao Paulo has the largest Japanese population outside of Japan, but still betting on the real did not work out for everybody (ask UBS Pactual).

Now Nomura switched the flip again. From the insatiable demand for income and the currency story to something more conceptual, but decidedly cool: the iPad and Google.

Nomura in the spring of 2010 partnered with RCM (part of Allianz) and devised the Nomura Cloud Computing & Smart Grid fund. Sub-advised by RCM US, RCM Asia Pacific and AGI (with a bottom up research process labelled “grassroots”), the fund uses the cloud computing of Apple and Google’s smart grid work to market the green technology investment benefits.

Don’t think it works? Au contraire. The fund sold almost $1.5 billion in April 2010 (and once a fund sells in excess of $1 billion in Japan, it’s out of the gates and ready to target $5 billion).

Nomura is a marketing powerhouse and continues to flex its muscle when it comes to combining hype, vogue and investing.

A few years back it sold the Nomura Pictet Premium Brand fund, and Japanese investors rushed in the door to invest in high-profile names such as LVMH and Hermes, now it decided to take advantage of the new sustainability theme in investing, since green technology has been among the better-selling themes of late.

We see a ton of innovation around the world these days when in investment management and mutual funds, but Japan definitely has been and continues to be on the forefront, not only inasmuch as the product design is concerned, but also in regard to marketing and cutting-edge information delivery.

Nomura’s website features a ten-minute video for the cloud computing/smart grid product to explain the concept and make the investment case to clients – and the literature takes conceptual simplicity to new heights.

Luckily it is easier for foreigners to learn about cutting edge product and marketing themes in Japan than to find a building in Tokyo.

Arigato gozaimashita.