RWC has launched the RWC Nissay Japan Focus Fund, a sub-fund of its Luxembourg SICAV, operating as a long-only Japan equity fund focused on bottom-up stock picking and constructive engagement with its investee companies.
The fund has day one investors totalling approximately USD40 million, and has a significant pipeline.
The fund will further expand RWC’s joint venture with Tokyo-based Nissay Asset Management (NAM) and will closely replicate an existing Japanese fund that is an AIF and was launched in 2005. That fund recently marked its 10-year anniversary and has generated exceptional performance of 34 per cent over the TOPIX since inception. Over the past three years this strategy returned 161 per cent, with both lower volatility and lower beta than many of its peers with a Sharpe ratio of 2.5. Last year finished up approximately 30 per cent, an outperformance of over 17 per cent over the TOPIX.
RWC also confirms the newly launched fund will be registered in the major European jurisdictions with the appropriate tax requirements.
James Tollemache from RWC, says: “With the launch of this new fund, we are able to give investors exposure to established engagement expertise in Japan within a UCITS structure. There is a supportive backdrop to the launch of the fund at this time. The ostensible purpose of Prime Minister Abe's decision to call a snap election in December 2014 was to confirm his mandate for the so-called "third arrow" reforms which he has been trying to push in his "Abenomics" programme. As part of this initiative he has been leaning on corporate Japan to reduce its excessive cash pile and to focus on shareholder value, echoing similar complaints from shareholders over the years. There has also been the introduction of a Stewardship Code for big investors and we can expect a corporate governance code to be coming soon.
“We believe that a “constructive engagement” approach is the only kind of shareholder engagement which can succeed in Japan, and the team’s outstanding success over the years is demonstrated in the outperformance. Given the changing environment and the unique and deep rooted relationship Nissay Asset Management has with the Japanese corporates, we feel we offer something truly differentiated.”
