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Atlantis Japan has another great year


Atlantis Japan has another great year – Atlantis Japan Growth Fund has published results for the year ended 30 April 2018. The NAV per share increased by 38.8% compared to an increase of 13.5% for the TOPIX in GBP. Aided by this strong NAV performance, the market capitalisation has now increased to over GBP110m. The discount was 9.6% on 30 April 2018 and 6.8% on 6 July 2018.

Strangely, the manager’s report contains no information on the performance of stocks in the portfolio. They did make a comment on the state of the Japanese economy and the stocks that they thought might benefit from positive developments, which we though was worth reproducing here.

Japan’s economy is mature and growth potential is limited to 1% – 2%. However, there are profound economic and social structural changes underway that are fostering attractive investment opportunities. These trends include: 

  1. Japan’s demographics are irreversible as the population ages, demand for geriatric healthcare products and services will climb.  The Company’s exposure to healthcare is focused on niche specialist equipment companies with global reach (Asahi Intecc), leading edge drug discovery ventures (Peptidream) and well managed care providers (Solasto). 
  2. Japan is a leader in providing robots, material handling systems and other capital goods to manufacturers and logistic companies, particularly in Asia.  The Company’s investments in this area are intended to tap into growth and include Daifuku, Keyence and Mitsubishi Electric. 
  3. Japan’s ever tightening labour supply has prompted companies to re-examine their personnel practices.  Outsourcing non-core and core operations has become standard practice as companies cope with personnel shortages.  The Company has exposure to this rising demand for outsourced corporate services through Benefit One, Creek & River and Fullcast. 
  4. The rising secular demand for semiconductors due to the advent of the Internet of Things, automobile electronics and content digitalisation has flattened out the semiconductor and semiconductor production equipment demand cycle.  The Company’s investments in semiconductor production equipment include Lasertec, Tokyo Electron and Japan Material which represent a high global market share in equipment occupying critical locations in semiconductor production lines. 
  5. As Japan’s economic structure shifts away from manufacturing to services, there has been a noticeable increase in demand for consultant services.  Over the past year the Company increased exposure to this sector by investing in Advantage Risk Management and Aoyama Zaisan Networks in addition to holding M&A Nihon Center.”

AJG : Atlantis Japan has another great year

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