EI Sturdza, Rheos launch Japanese growth equity fund

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EI Sturdza Investment Funds has teamed up with Tokyo-based manager Rheos Capital Works to launch the EI Sturdza Strategic Japan Opportunities Fund.

The Japanese small/mid-cap growth equity fund will be managed by Mitsuhiro Yuasa, co-founder of Rheos, the investment adviser to the fund.

The Dublin-domiciled Ucits V fund will invest in high performing Japanese institutions – growth companies that illustrate consistent revenue/profit growth and a track record of strong management regardless of size, history, brand or market capitalisation in order to generate alpha by outperforming the TOPIX TR Index (JPY) over the long term.

In order to identify potential growth companies, the team applies a disciplined bottom-up approach, combined with a macroeconomic view overlay.

Around 70% of all stocks held in the portfolio are domestically oriented companies.

“We seek to invest in companies which have a clear vision, and have people with the time, energy and emotion required to achieve its objective. We have been searching and investing in such companies in the Japanese markets for the last 14 years and still see a lot of potential growth companies in Japan offering compelling investment opportunities,” said Mitsuhiro Yuasa, portfolio manager of the EI Sturdza Strategic Japan Opportunities Fund.

Regarding Abenomics, Yuasa assessed that since Prime Minister Abe assumed his current position in late 2012, Japan has had its most stable government.

“The strong government aims to make the country a global economic leader, bringing confidence back to the people and present Japan’s potential to others. Prime Minister Abe has a grand vision for Japan, in which people are working healthy and are not worried about the future. This vision is backed by the government, while Japanese companies realise the importance of improving productivity, profitability, and return on equity to make their company’s attractive, not only to investors but also people who may buy products or services from them or work as employees.

“Based on the current popularity of Abe, he may be able to maintain his current position until 2021, while the country also benefits from the strong tailwinds associated with the 2020 Tokyo Olympic Games,” he said.