Interactive Investor

Japanese star fund manager bows out after 50 years

19th July 2022 11:35

Sam Benstead from interactive investor

Martin Currie restructures Japan investment team after veteran investor Hideo Shiozumi announces retirement. 

Japanese equity veteran Hideo Shiozumi is stepping back from fund management after more than 50 years.

Leaving his portfolio management duties at the end of September, he has managed the £580 million FTF Martin Currie Japan Equity fund since 1996.

He began his investing career in 1970 and managed hedge fund manager George Soros’ Japanese stocks allocation in the 1980s.

Under his tenure, FTF Martin Currie Japan Equity was the best-performing Japan fund available, returning 532% compared with 108% for the typical manager.

Shiozumi founded Shiozumi Investment Limited in 1990 to invest in Japanese stocks, partnering with investment manager Martin Currie (prior to that Legg Mason) to allow international investors to access the fund.

From 23 September 2022, Martin Currie will co-manage the fund alongside its parent company Franklin Templeton. Legg Mason was acquired by Franklin Templeton in 2020, which led to the fund switching to Martin Currie.

Taking over the strategy is Paul Danes, a Japan specialist already at Martin Currie. He will work closely with Reiko Mito, a new hire for Martin Currie from GAM Investments. Mito co-managed the Japan Equity and GAM Star Japan Leaders fund at GAM. She joins in August as head of Japanese equity and strategy.  

Shiozumi will continue as a senior adviser to the fund for 12 months after giving up investment duties. He will work with Mito and Danes during the transition period “to ensure continuity and preserve the investment style and philosophy of the fund”.

Mito commented: “I am delighted to join Martin Currie, a well-known and respected brand with a strong track record in active equities. I am excited to work with the team to expand our Japanese equity capabilities, while leading the idea generation and research for the fund.”

Shiozumi’s daughter, Rena Sasaki, who helped manage the Martin Currie Japan Equity fund, will no longer be involved in fund management.

The leading Japan strategy was a member of interactive investor’s Super 60 list of recommended funds until January this year.

Dzmitry Lipski, head of funds research at interactive investor, praised its expertise in buying companies that can exploit and benefit from a changing Japan – an ageing population, changing consumer lifestyles and “internet empowerment”.

But the fund was removed from the list due to its increased level of risk. Lipski said at the time: “While we acknowledge that the fund has delivered excellent long-term returns, it has a very strong style bias and invests predominantly in small and mid-cap companies.

“This means that when markets are strong the fund does a good job of capturing upside, but when the tide turns against it, the fund can suffer heavy losses. Consequently the fund's volatility has been much higher than peers and as such it is being removed.”

Performance has waned this year, with the fund losing 27% compared with a 11% loss for the typical Japan fund. Its strategy of buying riskier but higher-growth stocks has come under pressure as interest rates have risen around the world.

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