Investment Fund Awards 2018

www.wealthandfinance-news.com 34 Wealth & Finance International - 2018 Investment Fund Awards Established in April 2005, Stats has since flourished and gained a reputation for excellence thanks to its vast industry expertise. Today, the flagship investment vehicle of Stats is the Ginga Service Sector (“GSS”) Fund, which is a Cayman unit trust first established in June 2006. The strategy largely concentrates on Japan listed companies in the IT and Service sectors focusing on medium and small size stocks. These stocks are not widely covered by analysts so that proprietary research can generate alpha. These sectors are also one of the few areas in the Japanese market that have growth potential and exhibit above average volatility. The characteristics of these sectors require investment manager to process special instincts and strong insights on companies’ businesses. The GSS Fund has performed extremely well with 12-year consecutive positive track record, and has achieved a net accumulated return of 300% for its Yen share class. The strong historical performance and risk management process supports the GSS strategy which effectively generates exceptional returns in various market environments and market cycles. In 2017, Stats has successfully launched a Euro- denominated UCITS fund and has partnered with a long-term investor and launched a new managed account mandate. Stats currently manages over $300 million in assets. 80 % of Stats client base is outside of Japan. The client base is geographically diversified, spread out amongst Institutional clients, Family Offices, FOFs and Financial Institutions from Asia and Europe. The firm’s CIO, Toru Hashizume, is one of Stats’ founding members. Prior to joining Stats, he worked as a sell side analyst for more than eight years with one of the major research institutes in Japan and specialized in the IT and Service sectors. Later, he moved to one of the largest mutual fund companies in Japan and managed its equity fund for more than seven years. After joining Stats, he built a disciplined long short strategy with new risk management framework. US educated, Yhu Kuni, has worked with Toru for more than 10 years since the inception of the fund as fund manager and IT service sector analyst. Stats’ investment philosophy is based on in depth corporate research, and for this purpose the fund managers have a disciplined company visit program, which amounts to 400 companies per year per person. As a team they visit more nearly 1000 companies per annum. 2018, like any other year, has been a challenging period for hedge fund managers. From the beginning of the year, investor sentiment was over bullish and aggressive risk taking was dominant. It easily shattered when indications of a market correction emerged. US protectionist policies, the cryptocurrency bubble burst and the VIX crash, decimated the market. As the underlying fundamentals of Stats’ companies were expected to worsen and earnings growth to slow down, the firm did not do too badly despite the global tantrum by keeping their exposures at the lower end of the norm. The outlook for increasing volatility remained high so the team continued with a tightly controlled risk portfolio. During Q2, earnings announcements triggered a pickup in alpha returns especially on the short- side. Despite concerns of a global economic slowdown, small caps resisted the downside from the beginning of the year as retail investors Stats Investment Management Co., Ltd is an innovative fund manager specializing in managing Japanese Equity Long/Short strategies. We profile the firm to gain an insight into the services and investment options it has to offer its esteemed clientele. Hedge Fund Managers of the Year 2018 - Japan Stats Investment Management Co., Ltd. continued to trade themes and momentum. However, this collapsed as the risk premium on small caps became unjustified considering that we may be at a late stage of the economic cycle. Unwinding activity penalized small caps more than large caps due to limited liquidity compounded by momentum reversing course. More recently, the firm observed a relief rally in September. Investor sentiment had been over- pessimistic for a while, and despite concerns about a global slowdown and US-China trade escalations, US economic figures continued to be strong. The yen weakened as the US-Japan interest rate spread increased, which then triggered short cover activity in futures. The Nikkei index surged 8% from the lowest point in September, erasing the YTD negative market performance to plus territory. Cyclicals and financials, which were largely underperforming, became some of the best performing sectors. Although Stats’ performance was still solid on the short side, given the firm’s low exposure to these sectors, it did not generate as much returns on the long side. Looking ahead, the team at Stats are confident that they will continue to find good opportunities to pick-up names from excessive mispricing in the market. The team have experienced many headwinds in the past but have come out successfully, and as such they will continue in their efforts to generate superior uncorrelated returns, even in a challenging environment. Company: Stats Investment Management Co., Ltd. Name: Tatsuya Yamashita Address: COI Hirakawa-Cho Bldg. 7F, 1-7-20 Hirakawa-Cho, Chiyoda-Ku, Tokyo 102-0093 Japan Telephone: +81 3 6658 4361 Web Address: www.stats.co.jp FD180004