Asuka Asset Management launched in April the Asuka Value Up Fund, a friendly Japan activist fund. The fund launched with $50 million under management. The new fund is the third hedge fund under the Asuka umbrella. Asuka was established in 2002 as a result of an MBO by the principals of Tudor Capital Japan. The group has approximately $600 million in assets and also manages a Japan long/short and global opportunities fund.
The new fund will invest in small to mid cap stocks between $50 million and $1 billion, and will seek to obtain minority stakes of between 5%-10% of undervalued publicly listed companies with good corporate management. The fund will seek to invest in 20 to 40 stocks and occasionally short the index or large cap stocks for hedging purposes.
The fund expects to return 15-20% per annum from its investments. About 5%-10% of return this will come from value stock picking, with a further 10%-15% of return to come from the improvements in stock price that the team will trigger through the value-up solutions they offer the company.
"With our new fund, our mission is to create a win-win situation between investors and corporate management," says Yosuke Mitsusada, chief fund manager for the value up fund. Mitsusada has nine years of public equity experience at Nippon Credit Bank and Gartmore and five years of private equity experience at Unison Capital.
" Five years ago, Japanese companies would not have paid much attention to their minority shareholders. However, the environment has changed now. Small companies are increasingly threatened by the recent hostile activities of some funds and are now very keen on protecting their companies. The way to do this is to raise their corporate value, but many companies do not know how to do this and are looking for an advisor."
Mitsusada highlights that Asuka differentiates itself from other activist funds in the market by its friendly approach and also by the range of solutions its team has to offer.
"A friendly approach works much better in Japanese corporate culture and our team is made up of Japanese locals who have a deep understanding of the companies and markets here," says Mitsusada.
The Asuka team also have a range of solutions to offer the corporates they invest in including business, financial and asset solutions. To assist with the disposal of assets Asuka has in place a strategic relationship with a real estate player in Japan. In addition to assist with business solutions the team has an alliance with a consulting firm in Japan
Asuka has also established a team of five dedicated specialists at Asuka Corporate Advisory who will work together to create suitable value up plans for the companies they invest in.
Activist funds have been the new rage in Japan recently, with funds such as Symphony and Sparx known to be running such funds.