Nintendo heir reveals plans for 'mind-blowing' family office

A screengrab of the Yamauchi No. 10 Family Office website, which is themed like a 1980s arcade game.
A screengrab of the Yamauchi No. 10 Family Office website, which is themed like a 1980s arcade game.PHOTO: SCREENGRAB FROM Y-N10.COM

TOKYO (Bloomberg) - Family offices come in all shapes and sizes and typically do not disclose what they are up to.

Then there is the one that manages the wealth of the family behind Nintendo.

A loud, upbeat ditty plays as people enter its website, which is themed like a 1980s arcade game. Blocky retro-graphics flash in different colours as the screen scrolls diagonally. All sorts of big-pixelled characters and objects pass by. The text rolls like game or movie credits, declaring what the family office stands for. Twitter users call it cool, amazing, the best site ever.

"I wanted to create something 'mind-blowing'," Mr Banjo Yamauchi, family representative of the Yamauchi No. 10 Family Office and descendant of Nintendo founder Fusajiro Yamauchi, said in the investment firm's first-ever media interview.

"It represents our nature of doing something that's not been done before."

Family offices, the lightly regulated entities that manage money for the wealthy, have proliferated in recent years. There are at least 10,000 globally overseeing a single fortune, with most of them starting this century, according to EY.

But, while Japan is home to plenty of billionaires, most of the growth in family offices in Asia has come from elsewhere, in places like Hong Kong and Singapore.

Mr Banjo Yamauchi started the investment firm last year to manage assets previously owned by former Nintendo president Hiroshi Yamauchi, who died in 2013. The late president adopted his grandson as his own son and left him, among others, an "enormous inheritance" that he received at the age of 21, Mr Banjo Yamauchi said.

"As strange as it may sound, on paper I'm my biological father's brother," he added. "Since that time, I've tried to understand why I found myself in these circumstances."

Mr Hiroshi Yamauchi, the third president of Nintendo, took over the playing-cards business that his great-grandfather Fusajiro established in 1889 and turned it into a global video-game giant.

He led Nintendo for more than five decades until he stepped down in 2002. The maker of the Switch console and creator of franchises including Mario and Pokemon now has a market value of more than US$80 billion (S$106 billion).

Mr Banjo Yamauchi says he remembers the elder Yamauchi as harsh but also kind. His grandfather took him to Toys 'R' Us every New Year to buy him presents, but he never had the guts to ask him to buy Sony or Sega games, he recalled.

Now 28, he grew up in Kyoto, where Nintendo is based, before going to university in Tokyo and working at advertising firm Hakuhodo.

He said the idea to start a family office came as he was contemplating what to do with his inheritance and reflecting on his grandfather's way of doing things differently from others.

"I had to succeed not only his fortune but also his philosophy," he said.

He set up the family office in June last year to manage the assets that he and some other family members inherited.

Mr Hiroshi Yamauchi held about 10 per cent of Nintendo's stock before his death, according to data compiled by Bloomberg.

Mr Banjo Yamauchi and his father each inherited about 3 per cent of the company, while two aunts each received about 2 per cent, according to a filing in 2013.

The Yamauchi No. 10 Family Office manages more than 100 billion yen (S$1.2 billion), Bloomberg reported in January, citing sources with knowledge of the matter.

Mr Banjo Yamauchi declined to comment.

'Create something'

The family office is not focused on doubling or tripling its assets, according to him. 

The goal is to be involved in projects that give back to society, propose new choices that help make changes in Japan and allow people to challenge themselves, he said, declining to give details of specific investments. It also intends to be involved in philanthropy.

"We feel that Japan is lacking the spirit of taking the challenge or risk to create something," he said. "That's the point we'd like to change."

The family office hired former Schroder Investment Management (Japan) executive Yoshiya Ichimura as chief operating officer in March, according to his LinkedIn profile. Co-chief investment officer Hirowaka Murakami joined last year after stints at Deutsche Bank and Goldman Sachs Group. Chief research officer Masaru Sugiyama is a former Goldman Sachs analyst.

The firm was able to make high-profile hires by explaining its objectives and that it was a place where people could take on new challenges, Mr Yamauchi said.

He said the family still holds shares in Nintendo, but declined to disclose the size of the positions. His firm will adopt the Nintendo way of making something exciting and surprising in its projects, he said.

But on some details, he preferred to remain vague. Asked about the No. 10 in the family office name, he declined to explain.

"It's a secret," he said. "We'd like for you to imagine what it means."