Goldman’s Matsui Turns Abe to Womenomics for Japan Growth

When her sister graduated from Harvard University in 1981, Kathy Matsui’s father gave her a choice: Get accepted, or get ready for a lifetime of labor raising roses.

From the farm in Salinas, California, to Harvard and Goldman Sachs Group Inc. in Tokyo, the family work ethic has underpinned a career that lifted Matsui to the top of her profession. Now, 14 years after publishing her ideas on how to upend gender roles in the Japanese workforce under a doctrine known as womenomics, Matsui has the ear of Prime Minister Shinzo Abe, who made her research into a plank of his growth plan.

“Warmness alone doesn’t make flowers bloom,” Andy Matsui, whose daughter later became Goldman Sachs’ first female partner in his native Japan, said in a telephone interview last month. “You never hear a success story for a spoiled child.”

Kathy Matsui arrived 24 years ago at her first brokerage job in Tokyo at Barclays de Zoete Wedd Securities speaking conversational Japanese. The mother of two, now 48 and fluent, joined Goldman Sachs as chief Japan equity strategist in 1994 and was ranked the No. 1 stock market forecaster for Japan in 2000, 2001 and 2006 by Institutional Investor magazine.

Matsui’s interest in gender issues was piqued by her own climb. She published the first womenomics report in August 1999, arguing that equalizing roles in the workforce was a better solution to Japan’s shrinking labor pool than loosening immigration laws or raising the birth rate. Back then, the proportion of working-age women with jobs was 56.7 percent, according to the Statistics Bureau. In 2012, it was 60.7 percent, a record, though still not high enough, she says. In the U.S., 69 percent of women between 25 and 54 had jobs in 2011, according to the Bureau of Labor Statistics.

Change Needed

Japan’s aging population and a debt burden twice as big as its economy mean more must be done fast, according to Matsui. By 2035, one third of all Japanese will be 65 or older, up from 23 percent in 2010, according to the National Institute of Population and Social Security Research. Japan could expand its workforce by 8 million and increase its gross domestic product as much as 14 percent by raising women in employment to about 80 percent, the same level as men, Matsui wrote in an April report.

“We have to convince the Japanese people that running a marathon with one leg is going to take a very long time,” Matsui said in an interview last month. “It’s still an alien concept that women might be working full-time.”

Work Ethic

Matsui attributes her own work ethic to growing up in Salinas. She attended Japanese language school on Saturdays, went to church on Sundays and cut flowers by hand after classes the rest of the week. Her mother, Mary, toiled in the family nursery every day and learned English at night while raising four children.

“Despite wearing four layers of gloves, you still ended up with thorns in your hands,” Kathy Matsui said. “But we got used to it, that was our life. In my family, money didn’t just fall from the sky.”

With degrees in social studies from Harvard in Cambridge, Massachusetts, and international affairs from Baltimore-based Johns Hopkins University, Matsui visited Japan for the first time in 1986 on a Rotary scholarship. She moved to Tokyo to be with Jesper Koll, now her husband, whom she met during an internship at Mitsui Bank.

‘Vital Component’

Invoking Matsui by name in a Sept. 25 essay for the Wall Street Journal, Japan’s Abe said womenomics is a “vital component” of his growth strategy. The premier has said he wants a society where “women can shine” by eliminating waiting lists for childcare and training mothers returning to work. He has encouraged publicly-traded companies in Japan to have at least one female executive and set a goal of women holding 30 percent of leadership positions in all areas of society by 2020, when Tokyo hosts the summer Olympics.

“Since he elevated this issue and made it a core part of his growth strategy agenda, people started waking up,” Matsui said. “The fact that he is even mentioning it is massive progress compared to any of his predecessors.”

Promoting women’s rights in Japan has long been a losing battle. The World Economic Forum ranked the Asian nation 105th out of 136 nations in its 2013 Global Gender Gap Report, which measures economic, political, education and health differences between men and women. Iceland was No. 1, followed by Finland and Norway. The U.S. was 23rd and China 69th.

Female Managers

In Japan, female executives make up about 11 percent of managerial jobs in the private sector, according to 2012 data from the Ministry of Health, Labor and Welfare. Women are paid about 71 percent as much as men, according to the ministry. About 62 percent of Japanese women quit their jobs after their first child is born, according to the IPSS.

Many of Matsui’s friends did. She thought about what would happen if they kept working and it prompted her to write the first report on gender in the workplace.

“Very few of my Japanese clients reacted to it at the time, though that wasn’t surprising since 99.9 percent of them were male,” she said. “Since I had ’three strikes’ against me as an inexperienced, foreign, female strategist, I knew the only way I could succeed was to write differentiated research.”

Competitors noticed a report that went past stock picking.

“The female labor participation had risen in the 1990s, but I found it interesting how she shed light on it,” said Chisato Haganuma, chief equity strategist at Mitsubishi UFJ Morgan Stanley Securities Co., who has been Matsui’s competitor for about 20 years. “It was a very good report and strategy in that it highlighted a change in our society rather than just talking about which stocks would rise and fall.”


In a study released on Oct. 1, 2010, Matsui listed 44 public companies in industries from daycare to nursing and food preparation that she said reflected women’s values. They rose 86 percent through Dec. 27, compared with a 55 percent increase for the Topix index, according to Goldman Sachs.

Her broader forecasts for Japanese equities have usually been bullish, a stance that paid off last year when the Nikkei 225 Stock Average beat every developed-market index. In November, she raised her 12-month projection for the Topix to 1,450, about 11 percent higher than the gauge’s 2013 close and a level unseen since 2007. The measure rose 0.2 percent to 1,295.95 yesterday.

Logic, intuition and contacts inform the calls, said Hiromi Suzuki, a Tokyo-based analyst at Goldman Sachs who has worked with Matsui since 1994, when they started the firm’s strategy team for Japanese stocks. She described Matsui, who was named managing director in 1998 and partner in 2000, as a serious, energetic and honest person who doesn’t micromanage.

Long Hours

“She’s tough mentally and physically and sticks to her schedule,” Suzuki said in an interview on Jan. 10. “She always tries her best to fulfill what she intends to do. Even if she has five minutes to the deadline, she focuses on what she can do within that time.”

A nanny has enabled Matsui to work long hours and travel, while her husband, Koll, runs Japanese equity research at JPMorgan Securities Japan Co. The biggest challenge came in 2001, after her second child was born, when she was diagnosed with breast cancer.

“Just when I thought nothing could go wrong, everything went wrong,” she said. “You just don’t know what twists and turns life brings. I was naturally shocked when I received my diagnosis, but facing my mortality at the age of 36 was actually a giant wake-up call.”

She took eight months off to recuperate in California with her parents and received chemotherapy. She returned to Goldman Sachs wearing a wig, deciding that staying at home all the time would be more stressful.

‘Demonstrating Womenomics’

“I saw how hard she worked when she faced difficulties and I learned what it’s like to be a strategist,” said Naoki Kamiyama, who worked for Matsui from 2000 to 2002 and is now chief equity strategist at Merrill Lynch Japan Securities Co. “In a way, she’s demonstrating womenomics by herself. It’s perfectionism. She embodies it.”

Matsui’s travel usually keeps her away from her family for two to three months a year, triggering “maternal guilt,” she said. “While it may be a sign that you’re really busy, I always feel guilty about spending so much time away from my husband and children.”

Yoga at 8 a.m. on Saturdays helps her body, and Nutella, a Cavalier King Charles Spaniel, warms her spirit. When times are toughest, though, Matsui said she thinks about her mother.

“I learned a tremendous amount from my mother and developed a newfound respect for her the minute I became a mother myself,” she said. “Whenever I have those moments when I’m really stressed out, I just think about what my mom had to go through and it puts everything in perspective.”

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