Wealth & Finance International - Fund Awards 2016

Fund Awards 2016 20 Best Hedge Fund Manager 2016 - Japan Stats Investment Management are based in Tokyo, Japan and has been running for over a decade. We invited Chief Operating Officer, Masahiko Iwai to talk to us about how the firm has achieved success. Company: Stats Investment Management Co., Ltd. Name: Masahiko Iwai Email: [email protected] Web Address: www.stats.co.jp Address: COI Hirakawa-Cho Bldg. 7F, 1-7-20 Hirakawa-Cho, Chiyoda-Ku, Tokyo 102-0093 Japan Telephone: +81 3 6658 4361 First established in April 2005, Stats Investment Management Co., Ltd. (“Stats”) is a hedge fund manager based in Japan. Stats specialises in managing Japanese equity in long and short term strategies. The funds which Stats offer ensures the best possible return to investors. The flagship investment vehicle is the Ginga Service Sector (“GSS”) Fund, which is a Cayman unit trust established in June 2006. The strategy itself largely concentrates on the IT and Service sectors as sources of alpha. In addition, it also focuses on medium and small size stocks, which are not widely covered by analysts so that original research can generate alpha unexploited by the market. Masahiko explains the company’s investment philosophy, which is a vital component of their client process. This process ensures the best possible returns for investors. “Our investment philosophy is based on the conviction that companies that are not widely covered by analysts provide greater opportunities for generating alpha through proprietary research. Also, we ensure liquid markets provide opportunities to exploit inefficiencies in stock pricing. Concentrating on sectors and companies with experience and knowl- edge is essential in understanding the businesses and products of your invested companies. Finally, ensure these sectors are one of the few areas that have the dynamism to dynamically change its business and pursue growth opportunities. “Corporate research is the backbone of Stats’ investment decisions. The fund managers’ company visits are extensive and rigorous; each fund manager visits 400 companies per year, and as a team the total will be more than 1,000 companies. Since many information technology com- panies that Stats invests in operate in Tokyo, our office location provides us with a distinct advantage. “In order to make our long short strategy successful, we believe that the skills to manage risk both at individual stock level and at portfolio level is extremely important. For this purpose, we limit our individual stock exposure to maximum 5% (under normal circumstances 3%). We also employ a paring strategy to avoid excessive tilts in sectors or investment themes. For this purpose, we adopt a proprietary sector allocation to capture the true natures of the businesses of our invested companies.” Stats Investment Management is supported by members with long experience and deep insights. CIO Toru Hashizume is one of Stat’s founding members. He started his career as a sell side analyst with one of the major research institute in Japan and specialised in the IT and Service sectors for more than eight years. After this starting career, he moved to one of the largest mutual fund companies in Japan and managed its flagship long only Japanese equity fund with 3-billion-dollar asset for more than seven years. He joined Stats in 2006 and started the long short strategy with innovatively new risk management. Working with the CIO is the fund manager Yhu Kuni, who has worked with Toru more than ten years since inception of the GSS Fund. With experienced executives such as Toru, Stats has gone from strength to strength and has had tremendous success since their inception. “The combination of our solid investment philosophy and experienced staff has produced extremely good performance over the past ten years. With no single negative year, GSS Fund’s flagship Yen share class has recorded an annualised return of 13.92% with an annualised risk of 8.71%. This return itself, along with the longevity of our track record, makes Stats stand out above competition. “This achievement was highly recognised by various awards in 2016. Currently, Stats manages near $250 million in assets under the GSS strategy, and its client base is spread across various regions and various investor types globally.” Masahiko describes in depth the current state of the finance industry in the region. After having a weak start to 2016, the Japanese equity LA16036