What makes us different?

We believe that (1) Extensive multi-layered research by well-experienced professionals, (2) Sophisticated portfolio management by well-experienced fund managers and (3) Discipline throughout the investment process with a team-based approach, a proprietary knowledge platform as well as proprietary models and templates make up the foundation of our proven alpha generation and repeatability, and constitute our competitive advantage.

Besides being the key to identifying high quality investment opportunities, extensive research by well-experienced analysts is one of the foundations for replicating alpha patterns for consistent long time alpha generation.

Highly motivated and well-experienced analysts with a broad perspective and deep insights are at the core of our competitive advantage. What sets our research apart is the assignment and duty of proprietary research professionals. The assignments and duties of proprietary research professionals are limited to providing the earnings forecasts of the companies in charge as fast, timely and precisely as possible. They are not required to provide any information relating to stock price projection. We believe that the focus on proprietary research is what gives us a distinctive advantage.

The Mizuho Research Institute buy-side analyst survey shows how highly proprietary analysts are evaluated

Mizuho research institute Ltd asks each year the investor relation officers at companies listed on the 1st Section of the Tokyo Stock Exchange to rank buy-side analysts according to 1. Quality of hearing, 2.Information gathering, 3.Frequency of visiting and 4.Contact with management

The 19 proprietary analysts (15 years of experience on average as of September 30, 2011) carry out nearly 7,000 extensive field researches a year, covering approximately 800 companies to process and update earning forecasts on a monthly basis. In addition, they are engaged in sector research and thematic research. Sector research serves to identify mainly the competitive position of the companies and business trends at the industry level. Thematic research is ad-hoc research based on the recognition of a potential investment theme coming up in the marketplace to review and update the supply chain as well as the position of the companies.

Such multi-layered research provides us with broad perspectives to leverage our investment knowledge and insights so as to identify high quality investment opportunities.

Portfolio management by fund managers with a long experience is another key foundation to replicate an alpha pattern for a consistent duration of alpha generation.

We believe that a (a) proven bottom-up approach integrating quantitative approach and fundamental approach and (b) strong risk management based on a team-based approach, as well as proprietary knowledge platform models and templates lead to sophisticated and effective portfolio management and ensure the replication of an alpha pattern for consistent alpha generation.

(a) We have developed and refined our investment approach on the severe institutional market for more than forty years allowing us to replicate an alpha pattern for consistent long-term alpha generation.

(b) The fund managers monitor the risk profile and performance of the portfolio via proprietary and external risk management systems, and they ensure that the risk profile/risk budgeting of the portfolio is rigorous and justified at any time. In other words, risk budgeting of the portfolio is always carefully planned and no unintentional risk is ever taken.

This is the third foundation to replicate an alpha pattern for consistent long-term alpha generation. Key elements to maintain discipline in the investment process are a (a) team-based approach as well as a (b) knowledge platform (database), proprietary models and templates incorporating investment insights.

(a) The team-based approach is the primary key to ensure discipline in the research process – i.e. consistency and durability– because;
-It enables the investment professionals to share their “tacit” investment knowledge and insights. -It allows investment professionals to leverage their investment knowledge and insights so that the analysts can identify high quality investment opportunities and the fund managers can generate and select the best investment ideas.

(b) We believe that a proprietary knowledge platform (database), models and templates, incorporating investment insights, ensure the consistency and transparency of the investment process through “explicit” investment knowledge and proven systematic methodologies.