(Corrects paragraph 3 to clarify that AIG's sale of its asset management business to Pacific Century has not yet been completed)
TOKYO, Dec 18 (Reuters) - PineBridge Investments Japan, formerly AIG Investments, is planning to ramp up its business with retail investors by offering new funds to meet their increasing demand for higher returns, the head of the company said on Friday.
Japanese individuals hold about $15 trillion in personal savings largely parked in low-yielding accounts, and retail investors have been taking on more risk as the global economy picks up and while the Tokyo stock market lags other countries.
The asset manager expects to launch a new retail-targeted investment trust fund, or toushin, during the first quarter, its first in a year and the first since American International Group agreed in September to sell its asset management business to Hong Kong tycoon Richard Li's Pacific Century Group.
The new toushin fund could be a unit-type fund which includes equities.
"I don't expect pension funds will start increasing investments in equities next year, which means we're having to turn our attention to investment trust funds," PineBridge Japan CEO and President Tadashi Akimoto told Reuters in an interview.
PineBridge's institutional business has struggled to grow this year, with investors like pensions reducing their exposure to equities and alternatives such as hedge funds as they look to reduce risk.
PineBridge Japan held a total of 5.85 trillion yen ($65.19 billion) in assets under management as of Nov 30.
Of that total, assets in investment advisory totalled 5.07 trillion yen and the rest comprised privately and publicly placed investment trust funds.
But Akimoto said the total will shrink to about 1.2 trillion yen in June when PineBridge transfers 4.65 trillion yen held in advisory back to the AIG group, which was rescued by the U.S. government with public funds during the credit crisis.
He added that he expected the firm's headcount in Japan to stay around the current 119 over the next year. ($1=89.74 yen) (Reporting by Michiko Iwasaki and Chikafumi Hodo)