“Taking time is Japan’s strength.”

This interview by Björn Eichstadt and Lilli Haberstroh was published on January 7, 2025 in the magazine “Japan Business in Germany (J-BIG)”.

In an interview with J-BIG, Gerhard Wiesheu, CEO of Bankhaus Metzler and a central figure in the German-Japanese business community, shares the background to his long-standing professional and personal ties with Japan. In his roles, including as Chairman of the Board of the Japanese-German Business Association (DJW), supporter of the Nippon Connection Film Festival and regular companion of Chancellor delegations, Wiesheu is intensively committed to the expansion of German-Japanese economic and cultural relations. In this interview, he spoke to us about his beginnings in Japan, the history of the bank with Japan and the opportunities and challenges arising from current geopolitical and demographic developments.

J-BIG: What role does the Japan-related business play for you in relation to the overall business?

Gerhard Wiesheu: The M&A business is our transaction area and is correspondingly volatile: sometimes there are large, sometimes medium-sized deals – a reliable pipeline is therefore crucial. Our asset management business runs in parallel to this, delivering stable fees as we manage mandates from insurers and pension funds, for example via our US subsidiary for the real estate business in Los Angeles and Seattle.

The similarities between the German and Japanese economic structures, particularly in the mechanical engineering, chemical and automotive sectors, make Japan a strategically important market for us. When it comes to acquisitions or sales in these sectors, a Japanese company is often involved, and we are well networked here, from SMEs to DAX companies. Our Japanese business therefore makes a significant contribution to our overall business, as does our real estate business in the USA.

J-BIG: The Japanese branch was founded in 2001 and the Japanese have invested heavily in Europe. How has this developed for Metzler and for you?

Gerhard Wiesheu: The bubble first had to be processed, which took a long time. The real momentum came back in 2010, boosted by diversification after Fukushima, when Japan increasingly focused on international supply chains. In 2019, the EPA free trade agreement provided further impetus.

Geopolitical developments – such as the political risks in China and the Ukraine conflict – have shifted the focus of Japanese companies even more towards Europe and the USA. Many of these companies are financially strong and are now specifically looking for attractive foreign markets, which has further fueled the momentum.

J-BIG: The media attention tends to focus on the Chinese investors and the Japanese business is conducted quietly. But in your position you notice a lot. You have already described this dynamization due to the global situation, but there is another factor in Japan: the issue of demographics and the closed island market. What is your feeling about where this is going?

Gerhard Wiesheu: Demographic trends are a crucial factor: Japan is losing 700,000 to 800,000 people a year, and the population peaked in 2015. This is an enormous challenge for domestically oriented companies that rely on consumers – as well as for financial institutions and manufacturers. This is why the focus is increasingly turning to growth markets outside Japan.

J-BIG: Some of the reporting gives the impression that Japan is becoming stronger. But Japan has also invested more than many others over the last 20 years. It’s not that you come from a low level and go up, but that you come from a high level and go even higher.

Gerhard Wiesheu: Japan does not have a debt brake or an ECB, but its own central bank. They make their own decisions and their foreign debt is less than 5 percent. This gives them much more flexibility and autonomy than us, as we have to comply with both a debt brake and the EU criteria.

On the potential: American and Chinese tech companies dominate the B2C business, which leaves little room for Japan and us. In B2B business, however, both countries can score points. Japan has a strong manufacturing sector, and we have a strong manufacturing industry, for example in mechanical engineering. When machines are in use around the world, huge amounts of data are generated that can be combined to create valuable data pools.

J-BIG: If you take a detailed look at how a Chinese electric car is constructed, you’ll see that most of the components are either German or Japanese. This means that the hardware is still very strong.

Gerhard Wiesheu: In semiconductors, Toray makes the nanofilms that separate the circuits from each other. Or the wind turbines we have here. Without the Japanese, nothing would turn. There are suppliers who are extremely strong – and if they don’t deliver, the machine doesn’t work.

J-BIG: So that’s the business dimension of your work. But you are also very active in voluntary roles in the Japanese-German community. Many of our readers know your name from these roles. How did this come about?

Gerhard Wiesheu: The economic component has always been a driving force, because our commitment must be in harmony with the company. Japan and Metzler are a good match because both make sense and complement each other. It’s not just the history that counts here, but also our inner attitude. Today, people talk a lot about ESG, especially about the “S” – social commitment. We have been involved for more than 350 years: Barbara von Metzler supported the renovation of the Städel Museum in Frankfurt, and Metzler was a founding member of the Senckenberg Foundation. For centuries, we have always been at the forefront of civic engagement.

Of course, we have to earn money in the Japanese business in order to secure our investments and continue to grow. But we also give back locally, for example by supporting the Nippon Connection Film Festival here in Frankfurt.

J-BIG: And that’s where Frankfurt and Japan come together.

Gerhard Wiesheu: We also support the Museum of Applied Arts (MaK), which houses one of the largest collections of netsuke and inro. Wilhelm Metzler endowed the MaK in the 19th century, and we are particularly committed to supporting exhibitions with a Japanese connection.

J-BIG: So the Nippon Connection is the “modern version” of what was done in the 19th century? What are your other activities?

Gerhard Wiesheu: Exactly, our commitment is not limited to financial support. We also actively help when something needs to be purchased, and both employees and the Board of Directors get involved. Since 2011, I have therefore volunteered to chair the DJW, where I was already a member and on the board. I was approached by the Ministry of Foreign Affairs for the JDZB. This is where the difference becomes clear: the DJW is our private-sector commitment, whereas the JDZB is state-run. We support them with our expertise and commitment, which can be very fruitful.

Another example is my chairmanship of the board of trustees of Georg-Speyer-Haus, which has been conducting cancer research for 140 years. What does that have to do with a bank? On the one hand a little, on the other hand a lot, as we also encounter many companies through basic research. Here we can combine the useful with the good – that is precisely our approach.

J-BIG: Where do you see your specific tasks at the DJW? Is it also about making your network available?

Gerhard Wiesheu: For the DJW, it is crucial that someone like me makes the organization better known and opens doors – in business and politics, both in Japan and in Germany. I was able to gain most of the supporting members in Japan through personal contact. Trips by chancellors and ministers are also a good opportunity to represent the DJW and act as an advisor. In 2014, Prime Minister Abe visited Germany, and in 2015 we traveled to Japan with the Chancellor, which significantly boosted German-Japanese relations. Merkel’s return visit and the subsequent consultations ultimately led to the EPA, which was ratified in Tokyo in 2019. We were represented there by the business delegation and half the cabinet – important talks and steps for both countries.

The fact that Olaf Scholz made his first chancellor’s trip to Japan and not to China, followed shortly afterwards by government consultations, was a strong signal. Participating in this cooperation and providing valuable input is a pleasure and is the core of our work at the DJW.

J-BIG: It seems as if Metzler has learned in these 350 years that the different dimensions of politics, business and culture do not exist in a vacuum, but are closely interlinked.

Gerhard Wiesheu: Exactly, and that’s how something comes about. There is the verb ‘metzlern’ – ‘Metzler’ not only stands for the bank, but also for the family and an open-door policy that brings people together. At our 350th anniversary celebrations in Tokyo, we invited our clients, of course, but also guests from the worlds of culture and politics. It’s about the big picture – bringing people and perspectives together.

J-BIG: We know from history that things that were initiated in 1860 had an effect in 1890 and that you don’t always know that beforehand. Those who only think in quarters can’t take on this dimension or this perspective.

Gerhard Wiesheu: We publish our balance sheet and income statement once a year, like any other bank. But as a non-listed company, we have the freedom to think and act for the long term. We know that culture and business are not mutually exclusive, but complement each other perfectly.

J-BIG: And can you perhaps see this even better if you have a connection to Japan? Japanese cuisine and tradition naturally play a huge role in Japan’s attractiveness as a business location. And while this is not so pronounced here, the Japanese have been practicing explicit nation branding for a very long time. From your experience in Japan and from your long experience here: What can we in Germany perhaps copy from the Japanese?

Gerhard Wiesheu: Straight away to the Japanese services: My wife does tea ceremonies and I often attend as a guest, watch and drink tea – I really like matcha tea. I always say: coffee wakes up the body, matcha wakes up the mind. I brew matcha every day, it’s my start to the day. You take time for these things and of course for the ceremony.

It is true that Japan has lower productivity than Germany, but I would never advise the Japanese to increase this productivity. Why? Because Japan has a gigantic customer service mindset. Of course, they have more people than we do, because they do a lot more themselves and serving customers in restaurants has a completely different significance. If you can afford that, productivity is lower. But for the Japanese asset, for what defines Japan, this is an important factor that cannot simply be rationalized away. Taking your time: That is Japan’s strength.

J-BIG: You’ve done a lot since you joined Metzler 23 years ago. Since 2023, you have been CEO and responsible for the entire business. Has this had an impact on the Japan issue?

Gerhard Wiesheu: Of course, new tasks have been added. We do almost all of our private banking for Germany, but the other three business areas are very relevant for Japan. We also regularly receive visitors from Japan, so I am in Tokyo, Osaka, Kyoto or Nagoya about four times a year. The exchange is lively – Japan is an important part of this bank. I can therefore continue to invest the necessary time. We have a Japan desk here and a strong team in Tokyo, so the work is well distributed and not all on me.

J-BIG: Now you’re 62, some people are already thinking about retirement. But are you also rather Japanese?

Gerhard Wiesheu: In this respect, the entire bank is rather Japanese. As we are not listed on the stock exchange, there is no fixed retirement age – it rather depends on the individual needs of the bank and the Management Board member. Some of our employees only retired at the age of 70. You don’t lose your expertise just because you turn 65 or 66. On the contrary: when experienced staff retire, we lose valuable expertise, and in times of a shortage of skilled workers, that is a loss of productivity. On the Management Board and throughout the bank, a lot depends on personal attitude, and I myself definitely plan to run the Japan business in the long term.

This interview by Björn Eichstadt and Lilli Haberstroh was published on January 7, 2025 in the magazine “Japan Business in Germany (J-BIG)”.

J-BIG: Mr. Wiesheu, you are very active in the German-Japanese scene: as Chairman of the Board of the Japanese-German Business Association (DJW), at the Japanese-German Center Berlin (JDZB) and as a sponsor of the Nippon Connection Film Festival. And you also accompany delegations of chancellors to Japan. Many members of the German-Japanese business community know your face and your name. But how did you actually get into the topic of Japan?

Gerhard Wiesheu: The whole thing developed over a long period of time, without a master plan – it just happened step by step. I was born in 1962 and came into a time when Japan was becoming really visible in Germany thanks to the emerging car industry. It began in the 70s, and in the 80s Japan became more and more present and stronger economically. I was impressed by this radiance. When I was 18, I met my future Japanese wife on a language course in England, and I visited her in Japan for the first time in 1981.

So my path led me to Japan again and again. In 1986, I spent six months there on a language and internship program run by the Carl Duisberg Society. In 1987, I started an investment banking trainee program at Commerzbank in New York, London and Tokyo. I was fascinated by the capital market and witnessed the gigantic upswing back then. I finally went to Tokyo in 1991, founded Commerzbank’s asset management in Japan and managed it until 1999.

By this time, the economic boom was already over. The bubble burst in 1989 and things went downhill from 1990 onwards. Nevertheless, it was a good time for foreign asset managers because Japan deregulated the financial markets in 1990. As the Japanese equity and bond markets were under pressure, more investments were made abroad, and this is where we were able to offer our services.

J-BIG: What was your exact role for Commerzbank in Tokyo?

Gerhard Wiesheu: There were three units there: the branch of the bank, a securities unit and the third, which I founded and managed – Commerz International Capital Management, the asset management unit for institutional clients. Our clients were pension funds, insurance companies, companies and company founders, but not private individuals. There were also German investors who invested in Japan, but the majority were Japanese who invested in Europe from Japan at the time.

Back in Germany, I moved to Metzler in 2001. Friedrich von Metzler was very interested in Japan, as he had been president of the stock exchange for a long time and knew Japan well. That was also a decisive factor in my move. We decided to set up a subsidiary in Japan, started in April 2001 and founded it in May. The licenses followed and the first customer was quickly acquired.

J-BIG: Back then, you probably benefited from a network you had built up over eight years?

Gerhard Wiesheu: The network had already existed for some time. I was in Japan from 1991 to 1999, but I was already in charge of the Japanese offshore funds in London in 1988. I knew the major Japanese investors, insurers and companies.

J-BIG: The fact that you met your future wife at 18 was a coincidence. What then became your primary substantive interest in Japan?

Gerhard Wiesheu: That was the economy. After the Second World War, Japan had to reinvent itself before it experienced an enormous economic upswing, which became increasingly visible here – be it through communication technology, the Walkman or Japanese cars and technology companies such as Sony.

I knew that Metzler could be successful in Japan because the bank has a centuries-old tradition and a DNA of solidity, reliability and trust. As early as 1893, Moritz von Metzler traveled to Japan on his father’s advice to get to know the market. The Meiji Restoration of 1868 brought comprehensive information about Japan to Europe for the first time, and Metzler prepared an early “feasibility study”, so to speak, which we were able to build on by founding a subsidiary in 2001 (laughs).

Our move to Japan was primarily based on asset management, but there is also a lot going on between Japan and Germany in the M&A sector. Metzler has access to the hidden champions of the German SMEs, unlisted companies and family businesses – no other institution is as firmly anchored in this network as we are.

J-BIG: In other words, when you read reports about the takeover of a traditional German company by a Japanese company, for example, is it highly likely that Metzler is involved?

Gerhard Wiesheu: We are almost always asked when it comes to transactions, even for larger projects. For example, we advised Daikin, the air conditioning manufacturer with 100,000 employees, on the acquisition of a hydraulics company and supported Daido Life with its investment in the German insurance company Nürnberger Versicherungen. We also advised the Frauentag Group in Austria on the sale of a company that manufactures vacuum filters for large power plants to Ibiden. We are active in various financial transactions across all sectors.

Our M&A team is one of the oldest in Germany, with roots in the 1970s, when Friedrich and Christoph von Metzler built up the M&A business after their time in the USA. They had the vision that the unbundling of “Germany Inc.” would come and laid the foundation early on for what is now our strong and professional network.

J-BIG: What is the role of a bank like Metzler when a Japanese company buys a German company, for example? Can you explain this for finance amateurs?

Gerhard Wiesheu: We are like a nakodo who brings the partners together at a wedding – a matchmaker between the German and Japanese corporate landscape. Thanks to our intensive contacts and regular exchanges, we know the future strategies on both sides. If one party wants to invest in a certain product or enter a market, we can specifically say: ‘A fits B’ and initiate the first talks.

This ‘matchmaking’ is followed by the technical implementation: company valuation, due diligence and contract review. Whether buying or selling, we go into great detail before a final decision is made. We also often support companies that want to focus more on their core business and therefore want to sell subsidiaries.

J-BIG: What exactly does Metzler’s business model look like?

Gerhard Wiesheu: In the M&A business, we receive a one-off fee based on the transaction value. The difference at Metzler, however, is that our work continues after completion. A successful transaction requires careful post-integration, in which we bring together different ideas and processes.

I take part in these meetings myself and there is also regular coordination at Management Board level. We coordinate the decision-making processes, support the operational team and bring special expertise that sets us apart from other providers.