Yhu Kuni, Fund Manager, Stats Investment Management
Can you tell us a bit about Stats Investment Management?
Stats Investment Management is an independent boutique investment manager in Tokyo founded in 2005. Our mission is to provide unique alternative investment products designed to provide stable positive returns and match demands from various institutions such as pension funds, family offices, financial institutions, fund of funds and corporate clients. The team consists of 11 skilled professionals who have previously worked at major foreign and domestic financial institutions in Tokyo. Our main investment strategy, Ginga Service Sector Fund, has consistently performed double digit annualised returns since inception in 2006. Performance for all years has been positive. The fund was nominated for the Best Japan Hedge Fund category in the 2009 Asian Hedge Awards and the Japan category in the 2010 AsiaHedge Awards. The strategy is managed by Toru Hashizume, CIO. Prior to Stats, Hashizume managed Japanese investment trusts including their flagship active equity fund as a Chief Portfolio Manager at Mitsubishi UFJ Asset Management for 9 years, and earlier was a sell-side analyst at Yamaichi Research Institute (research arm of the brokerage) for 7 years.
Describe your investment strategy and why it differs from what other fund managers are doing.
As the name implies, the fund is a sector focus fund heavily invested in IT-oriented service industries in Japan. We believe the investment universe is populated with rich alpha opportunities due to the highly competitive business environment with rapid developments constantly changing the industry picture. By continuously, regularly and constantly focusing research on these sectors, we believe we can identify individual mispricing opportunities arising from frequent valuation gaps and earnings volatility earlier than other market participants. We believe our accumulated research efforts and investment experience in this field is our competitive edge in providing unique uncorrelated returns to investors.
What investment themes in Asia do you see as the most attractive at the moment?
Within Japan, the current investment environment has been largely influenced by external factors and global macro uncertainties. This may sound negative for stock pickers but as this environment also provides volatility, we can pick up individual mispricings from an abundant pool of selections based on medium-term fundamentals and aim to reap large alpha returns going forward.
How has your approach to risk management changed in recent times?
In addition to our regular weekly risk management meetings, we hold daily meetings in times of major macro events such as the most recent East-Japan earthquake. Not only do we closely monitor the risk measures and discuss the portfolio risk levels to protect capital and minimise downside but we are also focused on repositioning the portfolio to maximise the potential alpha returns as the market gradually returns to normal conditions. We believe proper portfolio risk management has been one of our strong points for offering stable alpha returns regardless of market situation.
Do you see changes in regulation as a threat or an opportunity?
As the Japanese hedge fund industry is still developing, whether regulation may stimulate or restrict growth would be seen in the medium-term.
Fundraising in Asia: as Asian investors increase their hedge fund allocations, do you think Asian managers will start to benefit more or will big global fund managers get most of the assets?
We certainly would like to see investors select Japanese fund managers based on skill and results regardless of company AUM.
What impact did the March disasters in Japan have on your business?
After the East-Japan earthquake on Friday 11th March, we quickly reduced the portfolio’s gross and net exposures on the following Monday in light of the many unforeseeable risks at the time. We believe a combination of the quick reaction and rebalancing efforts in the second half minimised our monthly loss. We have received positive feedback from investors for our transparency and detailed information updates and have since then continued business as usual.
What would you have done if you hadn’t been a fund manager?
Perhaps something completely unrelated, like opening a ramen shop.