In 2010, in tandem with the recovery of the US equity market, the Silicon Valley-focused US emerging growth sector, which is Bayview Asset Management (BVAM)'s specialty since its establishment, signaled momentum for recovery from the economic slump that had lasted for ten years after the collapse of Internet bubble. Underpinning this growth are new Internet services that revolutionize the way we communicate such as SNS (social networking service). With additional commitments from pension funds as well as a mutual fund project in collaboration with Daiwa Securities Group in July 2010, our US equity products have made a remarkable advance.

In the Japanese equity market, the bottom-up approach based on fundamentals analysis had not demonstrated its effectiveness for long due to the financial crisis; however, America's QE (Quantitative Easing)Ⅱ in the 4th quarter of 2010 triggered a paradigm shift in the investment world. Meantime, in the summer of 2010, a Japanese leading stock picker, Ichiro Takamatsu and his team joined BVAM after six years of collegial relationship with us. Takamatsu is now heading the Investment Management Group II, and deploys the combination of bottom-up approach (corporate research) and top-down approach (market research) that is quite different from the strategies by our existing fund manager, Yasuo Sakuma, who heads the Investment Management Group I.

Under these circumstances, BVAM will continue to challenge in the fiscal year of 2011. Firstly, as a break from tradition, we welcomed our first batch of three employees recruited directly from university this April. As a part of our efforts to strengthen the long-term foundation of the organization, we will strongly support their integration into our company and their self-development to rear them as future leaders in Japan's asset management industry. Secondly, we are working on making inroads into the self-brand mutual fund business, which we have been considering since last year. As the needs of investors become more diversified, we believe that business opportunities will continue to grow in the retail market, which holds Japan's largest capital. We fully intend to leverage our capabilities as a boutique house to provide top-class, unique products for individual investors.