Blackstone Group LP filled a Tokyo ballroom earlier this month with locals seeking riskier U.S. loans as regulators in New York try and avert a credit bubble.
The money manager's seeking to bring more Japanese investors into North American credit markets as one of its senior executives predicts gains as high as 6 percent and as local sovereign yields languish near zero. In the U.S., efforts by regulators to limit froth in the $830 billion speculative-grade loan market are gaining traction, as ultra-low interest rates fuel demand for high-risk assets.
"If you're sitting here in Japan, and you need an alternative to JGBs to pick up some return, where are you going to go?" Daniel Smith, a senior managing director at Blackstone's GSO Capital Partners LP unit in New York, said in an interview. "You can go to emerging markets, but those look quite risky to us, so by process of elimination, U.S. credit markets are a relatively easy and sober choice."