Japanese Public Equities

Japanese listed businesses are undergoing a generational shift in corporate governance, welcoming constructive activist and private equity investors, unwinding cross-shareholdings, divesting non-core operations and freeing up corporate cash. These actions have the potential to unlock significant shareholder value. RIT accesses this specialist corner of the market through two outstanding managers.

Pillar
Quoted equities
Theme
Japanese value
Status
Current investment
Geography
Japan
Invested date
2002

Morant Wright

Morant Wright is an experienced Japan small and mid-cap value manager established in 1999 whose founding portfolio managers have followed Japan for over 30 years. It seeks to buy small- and medium-sized companies with strong balance sheets and significant cash/misunderstood assets, trading at a value similar to or less than their book value i.e. the sum total of a company’s assets and obligations.

RIT first invested in Morant Wright in 2002 and has benefitted from healthy outperformance to the Japan Equity Index (TOPIX) through the consistent application of the fund manager’s investment process.

~12%
Annualised return of RIT’s investment in Morant Wright since initial 2002 investment, local currency basis1
~7%
Japan Equity Index (TOPIX) total return over the same period, local currency basis1

3D Investment Partners

The shift in the perception of activist investors since government reforms has enhanced their ability to create catalysts to unlock returns in undervalued businesses.

3D is a hard-to-access Japan activist manager established in 2016 which has followed the Japanese market for over 20 years. RIT was able to invest with 3D by virtue of its proprietary network and our close relationship with the manager. It seeks out businesses with significant hidden assets and/or depressed margins that can be improved through engagement with company management.

1As at 30 June 2024
Source: Company information, Bloomberg