Gordian Capital Launches Japan Catalyst Fund
Gordian Capital has launched the Japan Catalyst Fund, a new fund sub-advised by Tokyo-based Japan Catalyst, Inc., a subsidiary of Monex Group.
Japan Catalyst invests in listed Japanese equities, seeking to generate outsized investment returns by leading the transformation of Japanese companies using a constructive approach in engagement with the senior management of these firms. The launch of the Cayman-domiciled fund follows the launch in April 2020 of a domestic fund, the Monex Activist Mother Fund, which has generated, since inception, a net return of +43.2% (end July 2021) and an excess return of 10.6% compared to the TOPIX over the same period.
Oki Matsumoto is CIO, Chairman of Japan Catalyst, Inc., and Monex Group CEO. He began his career at Salomon Brothers in Tokyo as a trader, before joining Goldman Sachs Japan, becoming the Partner in charge of trading, risk management, capital markets and special situations.
“Our edge is firstly, our access to key personnel including top corporate management and board members as well as senior officials in the Japanese government, secondly: our constructive approach to engagement based on long term corporate value creation including ESG and a constructive dialogue based on trust with corporate management and thirdly; working in a true partnership with the companies in the Fund’s portfolio. We believe the ideal form of engagement investment is offering an outside hand to support the management and companies when they are trying to change rather than taking an aggressive stance and forcing change for changes sake, where the counterparty is neither ready nor willing to change. Given our access to key stakeholder early in the engagement process, we can get a sense of their receptiveness to engage and willingness to transform,” said Matsumoto.
Taro Hirano is President / Chief Portfolio Manager and has over 20 years of investment experience including 16 years as a value investor at AllianceBernstein Japan. Earlier in his career he worked at McKinsey & Co for 5 years.
“Corporate governance reform in Japan since 2013 has been significant but it is still incomplete. We will be part of the catalyst in realizing further reforms and help increase corporate value, realize higher equity returns, and stimulate Japanese capital markets by supporting Japanese corporate management and accelerating change. The Fund is a high conviction, highly concentrated portfolio that takes a holistic engagement approach working with government, media and industry groups,” said Hirano.
Emi Onozuka, COO, held several roles during her 20 years in Goldman Sachs Asset Management Japan where since 2016, she headed the Stewardship Responsibility Group, leading research in ESG and conducted company research and engagements with investee companies. Onozuka is also currently the Chair of the Steering Committee for Japan Stewardship Initiative (JSI) for which the Japan Exchange Group act as secretariat and the Japan Financial Services Agency, the International Corporate Governance Network and Japan Business Association (known as “Keidanren”) sit as observers.
“ESG can be a powerful engagement topic to create long-term based corporate value, and we focus on ESG themes that align with our investment philosophy and investment time horizon. A portion of our firm’s profit is given back to the local community to further stimulate improved corporate governance and transformation in Japan,” she said.
Japan Catalyst will be leveraging independent fund platform Gordian Capital to provide operational, regulatory, and compliance support for the Fund, acting as the Manager. Gordian currently manages $6.2bn.
“We are pleased to be working with Matsumoto san and his team and look forward to supporting both them and the fund’s growth,” said Mark Voumard, CEO of Gordian Capital Singapore Pte. Ltd. “They bring a wealth of experience and unparalleled networks within Japan, combined with the right approach to activism for that market
and seek to implement significant, measurable, positive change.”
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