Japanese equity specialists Four Seasons is launching a Ucits-compliant version of its flagship long-only Japan fund in September 2018.
The move is part of a growing trend for Asia-based asset managers to launch Ucits or alternative investment funds in Europe.
Four Seasons said the fund aimed to utilise on-the-ground knowledge of the Japanese market to pick attractive Japanese companies that often do not appear on conventional benchmarks.
Four Seasons was created in 2006 by CEO Shigeka Koda and Managing Director Kahori Ando, who both also act as Co-Chief Investment Officers.
Shigeka Koda spent 14 years at Goldman Sachs prior to founding Four Seasons, where he was Japanese equity senior portfolio manager. Kahori Ando spent 12 years at Sparx Asset Management before joining Four Seasons, latterly as Japanese Equity Senior Portfolio Manager.
The firm is based in Singapore.
Shigeka Koda said: “We take a bottom-up approach and look at companies in less crowded markets, often mid-small cap ones. These are often firms which are under-researched and are more impacted by rapid change. Our philosophy is to capture the impact of this change at a discount. But although we have a mid-small cap bias, this is not a small cap strategy, we will trade larger firms when there is merit in doing so.
“After three decades of stagnation, it is understandable that Japanese equities are underweight in many international investor portfolios. But profound changes are now underway in the Japanese economy.”
Shigeka Koda said: “Global financial markets have been looking for a source of alpha since the end of the central banks’ ultra-easy monetary policy. Japanese equities are the third largest globally in terms of market cap, but the sector has been neglected by international investors for three decades. With deflation now leaving the system, demographic, technological and regulatory changes are combining to kick-start the Japanese economy.
“In particular, labour shortages and rising demand for labour will result in productivity improvements, rising wages, better management practices and increasing economic growth which will benefit Japanese equity markets and create significant opportunities to generate alpha.”