Brazil's Itau Unibanco has recently set up an asset management firm in Japan in a bid to tap into the country's growing institutional investor demand, Bloomberg reports.

Since it started offering investment trusts to Japanese investors three years ago, Itau has secured $11.5 billion in assets under management, the news service said. Figures from the Japan Investment Trusts Association reveal that retail investors hold $21.7 billion worth of Brazilian investment trusts. The bank is reportedly hoping to replicate this success with institutional clients in the country.

"My understanding of Japan is that there are two waves of investment. The first comes from the retail investors who demand alternative investments all of the team, and the second wave... is from the institutional investors," Roberto Nishikawa, Itau's senior managing director, was quoted as having said.

Japan is considered an important market for asset managers, particularly as most Japanese assets are still held in conservative bank deposits that carry very low interest rates. This potential is further strengthened by the growing interest in offshore investments and riskier asset classes.

Itau is reportedly working to increase its asset allocation for foreign investments from 9.1 per cent to as much as 20 per cent in three years.