Strategy Overview
“Asuka Value Up Fund” is a Constructive Activist Fund with over 19 years track record. The Fund was founded by Asuka Asset Management, one of the largest alternative managers in Japan, aiming at achieving unique alpha by maximizing the use of three different skills, which are Management Consulting Skills, Alternative Investment Skills and Private Equity skills.
In taking into account the nature of Japanese business relationships, we have developed a unique “Company-wide Top-down Project Approach” – or patient activist model – which has proven successful for many investments. Since its inception, the strategy has outperformed indices that rank Japanese equities.
Risk management is the key component throughout all the Asuka Group funds. The Asuka Value Up Fund has implemented carefully managed risk controls, taking into consideration: liquidity, concentration, stop-loss limit, etc., in order to minimize downside risks.
Our investors are long-term investors who understand the effectiveness of our patient constructive activist model. These investors comprise of Japanese pension funds and private investors.
Philosophy
Our Investment Strategy
The Asuka Value Up Strategy is a Patient Constructive Activist Strategy. Key characteristics of the strategy include:
- Invests in small to medium cap listed companies in Japan.
- Becomes an influential shareholder of undervalued companies from a long-term standpoint.
- Works together with company management to stretch corporate value and fill the value-price gap.
Asuka is actively involved in the management of our portfolio companies, where we launch focused “Company-wide Top-down Projects” in partnership with management. Illustrating the extent to which we work with management, these projects are often conducted through non-disclosure agreements and contracts.
Our Uniqueness
The Asuka Value Up Strategy Marries Three different “DNA”.
Engagement Cases
Our unique portfolio consists of both growth and value companies is one of the source of unique alpha.
This stock selection has been made possible through the wide range of value up activities we have proposed to investee companies.
We always bring concrete managerial options based upon deep research to solve the problems each company faces
Summary of Value Up Activities
Summary of Value Up Activities and “changes” in portfolio companies（2014-2016）
Messages from PF Companies
CEO, Consumer Durable Goods Company
“Though Asuka might be classified as financial investors, their mindset and approach is completely different from stereotypical financial investors. Their proposals include more “managerial” points of view than pure investors points of view such as the information on competitive analysis in oversea markets which we can not find out by ourselves.Their proposals give us good insight on the business planning in the future.”
CEO, Health Care Service Company
“Asuka has continuously brought creative business ideas to boost our corporate value. Introduction of new client channel, cost reduction and more. The dialogue with investors tend to focus on the capital issue, but the discussion with Asuka tend to focus to improve our business itself.“
CEO, Specialty Retailer Store Chain
“I guess it was made possible through their hands-on approach. In discussion store roll-out planning, for example, they have visited so many of our stores and converged numerical analysis and qualitative analysis into proposals. In other words,they understand the reality of our business”
CEO, Internet Service Company
“The uniqueness of Asuka’s approach is not only the excellence of proposal, but also the support to implement their proposal. They suggested that we explore the business in China.They actually helped us to make market research in China by setting up appointments and even visiting China together. Our launch of our China business owe al lot to Asuka”
On ESG
Asuka Value Up Strategy and Japan’s Stewardship Code
AsukaAsset Management Co.,Ltdwhich manages Asuka Value Up Fund has announced its support of the Japan’s Stewardship Code.（Aizawa Asset Management : stewardship.pdf ）
Asuka Value Up Strategy and ESG
We believe ESG activities sincerely taken by companies will successfully improve the corporate value in the long term through the enhancement of cash flow continuity and lowering the discount rate.
Based upon a long term investment point of view, we aim at discovering high quality companies and improving the corporate value of those companies through friendly dialogue and proposal with the companies.
As described above, we believe that Asuka Value Up Strategy and ESG share the same philosophy in selecting the excellent companies based on the long term persistency. We have utilized ESG’s approaches to enhance / complement our proprietary engagement approaches.
We don’t use ESG screening methods to figure out investment candidate. We apply ESG concept to check the validity of our stock selection.
In the stock selection process, we maximize the use of the ESG integration approach to figure out the hidden risk of the company. We also utilize ESG thematic approach to check the long term validity of macro circumstances which the investee candidates belong to.
In the shareholder’s engagement process, we might use the ESG engagement approach to improve the corporate value of the companies when we believe that the company’spoor compliance with ESG is destroying the corporate value and the improvement of ESG compliance will impact on corporate value.
Asuka Value Up Strategy and PRI (Principles for Responsible Investment)
We believe that there is not an overlap between the investment philosophy of Asuka Value Up Strategy and PRI, though our philosophy is alpha generation through our unique value up approach. We support the philosophy of PRI.
In signing the principles, however, we are carefully checking the prospective conflict between our existing product and PRI requirements.
Consequently, we haven’t signed PRI at this stage. We work on investment and shareholder’s engagement through our proprietary approach which includes ESG point of view.
As for the compliance with PRI in the future, we will sincerely discuss it, considering both the requirements from our existing clients and society.