|Name||Bayview Asset Management Co., Ltd.|
|Location||Bancho House, 29-1 Ichibancho Chiyoda-ku,
Tokyo 102-0082, JAPAN
Tel: +813-5210-3341 Fax: +813-5210-3385
|Established||January 7, 1998|
|Business||Investment Management Business (Investment Trust Management and Discretionary Investment Management)
Investment Advisory and Agency Business
The Second Financial Instruments Business
|Financial Instruments Firm Registration Number||Kanto Local Finance Bureau Director-General (FIF) No. 397
Securities and Exchange Surveillance Commission
|Membership||The Investment Trusts Association, Japan
Japan Investment Advisers Association
|Number of Officers and Employees||64
(as of April 1, 2019)
Chief Executive Officer
|Executive Vice President||Rieko Shimojo|
|Board of Directors||Naotaka Murasumi
|Executive Officers||Hiroaki Iwata|
|Legal Counsel||Anderson, Mori & Tomotsune Law Office|
|Shareholder||Bayview Holdings Co., Ltd.
(a holding company owned by officers and employees of Bayview Asset Management Co., Ltd.)
|Asset Under Contract||JPY 361.5 billion
(as of March 31, 2019)
Note: Assets denominated in foreign currency are converted at US$1=JPY113
|Assessment on Internal Control||SOC (Service Organization Control) Reporting No. 86* obtained from an independent external auditor (from FY2012)
* SOC (Service Organization Control) Reporting based on Practical Guidance of Audit and Assurance Implementation Committee No.86 (The Japanese Institute of Certified Public Accountants)
|Financial Audit||Financial statement audit report obtained from an independent external auditor(from FY2010)|
|January 1998||Established as a 100% subsidiary of RS Investments, a U.S. equity boutique investment firm that had started as an asset management arm of Robertson Stephens & Company based in San Francisco, to provide U.S. focused investment advice to Japan's institutional clients|
|February 1998||Registered as an Investment Advisory Company at Kanto Local Finance Bureau, started providing active investment management services of U.S. equity|
|July 1999||Formed the exclusive business alliance in Japan with Crosslink Capital, Inc.(founded in 1989 as a venture capital arm of RSIM), a venture capital, based in San Francisco|
|December 1999||Licensed as a Discretionary Investment Management Company by the Financial Reconstruction Committee, and entered into the pension fund management business|
|December 2000||Formed the exclusive business alliance in Japan with Horsley Bridge Partners LLC, a private equity firm, based in San Francisco|
|September 2001||Approved to manage currencies to meet the need to hedge currency risks accompanied by foreign currency denominated assets|
|April 2002||Acquired the majority equity ownership (90%) of the company from RS Investments through a management buyout|
|June 2002||Licensed as an Investment Trust Management Company by the Prime Minister of Japan|
|July 2002||Launched a Japanese equity hedge fund based on fundamentals bottom-up research|
|June 2003||Appointed to serve on the Board of Directors of Japan Investment Advisers Association (until 2010, reappointed in 2012, 2015, and 2019)|
|January 2007||Changed its company name from RS Asset Management Japan Co., Ltd. to Bayview Asset Management Co., Ltd.|
|January 2008||The 10th anniversary|
|April 2008||Formed the Board of Executive Officers, that acts as decision-making committee for business execution|
|April 2011||Commenced recruiting university new graduates since company was established|
|March 2013||Obtained the SOC (Service Organization Control) Reporting No. 86 from an external independent auditor on the control of discretionary investment management business|
|July 2013||Launched its first public investment trust for retail investors|
|December 2013||Started managing a proprietary multi-asset strategy. Launched AAA series fund (Active Asset Allocation Fund) based on quantitative modeling approach.|
|August 2014||Bayview Asset Management formed exclusive alliance in Japan with venture capital, ZenShin Capital Management LLC (current GoAhead Ventures LLC), based in San Francisco|
|July 2016||Formed an exclusive business alliance in Japan with Victory Capital Management Inc., a multi-boutique asset management firm, based in Cleveland|
|December 2017||Formed an exclusive business alliance in Japan with Cerebellum Capital, LLC, based in Silicon Valley|
|January 2018||The 20th anniversary|
Vision for 2019
In the Japanese stock market in fiscal year 2018, the Nikkei Stock Average reached its annual high of 24,000 yen in early October despite overseas factors, such as concerns over a global economic slowdown and the trade friction between the US and China. Although in late December, the Nikkei average temporarily fell below 19,000 yen as the rise in US long-term interest rates triggered a worldwide decline in stock prices, the market bottomed out and stabilized towards the fiscal year-end in anticipation of developments in the US-China trade talks and amidst receding expectations for additional interest rate hikes in the US. In fiscal year 2019, it is expected that the cooling of the global economy will become apparent while the prospect for Japan is not necessarily optimistic either with the consumption tax hike scheduled in October. However, potential demand to invest in cutting-edge areas is strong in light of technological advances, therefore it is anticipated that this would serve as a tailwind for small and mid-sized enterprises, particularly for those focusing on specialized areas.
Among the Japanese equity investment management services of Bayview Asset Management (hereinafter referred to as “BVAM”) and with the small and medium-sized stock market remaining stagnant, the New Alphex Long Short Fund, the Highly Selective Japan Mid/Small-cap Equity Fund, and the New Active Plus Fund managed by Koki Okahashi suffered harsh results in fiscal year 2018 in contrast to the favorable performances in fiscal year 2017. In fiscal year 2019, there are signs of improvement in the stock market’s demand environment, and BVAM plans to recover its performance by also enhancing its fund management team with the hiring of promising analyst in April.
“The Bayview Japanese Equity Long Short Fund”, managed by Takato Tanikawa, achieved stable performance compared to other Japanese equity hedge funds despite the stock market remaining highly volatile throughout fiscal year 2018. In fiscal year 2019, the fund manager aims to achieve strong performance in terms of absolute returns as well.
Meanwhile, the US stock market in fiscal year 2018 trended higher supported by the strong US economy and corporate performance, in spite of uncertainties over the US-China trade friction weighing on the market. However, prices plummeted when long-term interest rates rose in October from fears of accelerating inflation. Moreover, as expectations of an economic slowdown spread, the Federal Reserve Board showed signs of continuing its tight monetary policy evoking an immediate strengthening of the risk-off mode that resulted in the market declining significantly towards the end of the year. However, since the year turned to 2019, the market has rebound due to the Federal Reserve softening its tightening stance and hopes for the US-China trade disputes to be resolved. In fiscal year 2019, although concerns have emerged that the global economy will slow and trends in the stock market need to be watched carefully, BVAM believes that investors will focus more on small and medium-sized companies that can expand market share by developing new markets with unique products or services and, therefore, are not so impacted by the economy, unlike large corporations.
As for BVAM’s investment management services of US equities, opportunities are expanding to achieve excess returns by investing in companies that are less prone to be affected by macroeconomic factors or are increasing their profits with the adoption of innovative technologies or through structural reforms. Under such circumstances, the US Small & Mid Cap Growth Concentrated Fund (Condor) (launched in December 2017) that invests in 20-40 small-cap growth companies that represent the next generation, as well as the US Bio Venture (launched in February 2017) that invests in 40-60 small-cap bio companies developing promising new drugs, managed by RS Investments (hereinafter referred to as “RSI”), an investment franchise of Victory Capital Holdings Inc. (hereinafter referred to as “Victory Capital”) and a BVAM partner since its foundation, have maintained strong performance by investing in innovations, respectively. Furthermore, in February 2019, the US Micro-Cap Fund, a publicly offered investment trust managed by Integrity Asset Management, which is also under the umbrella of Victory Capital, was launched as well. The fund invests in micro companies (with a market value of less than one billion US dollars) and is expected to achieve significant returns with its entirely bottom-up analyses because it is extremely difficult to obtain such companies’ information.
As the stock market is increasingly showing spikes in volatility, the US High Dividend Equity Volatility Weighted Fund (launched in August 2017) based on the smart beta strategy and managed by Victory Solutions, a Victory Capital solutions platform, is steadily stacking up positive returns by investing in high-dividend US equities while keeping a check on volatility. This strategy covers an extensive variety of investment universe, for example, high-dividend US stocks or Japanese stocks, excluding those of the financial sector, and allows customization to meet the needs of the respective investors. In September 2018, BVAM began offering a market neutral strategy in the Japanese market based on machine learning technology through a fund managed by Cerebellum Capital, which was founded by leading experts in the field of artificial intelligence (AI) and in which Victory Capital has a strategic investment. This strategy aims to achieve excess returns using models generated and selected purely by AI, eliminating all human judgement.
With start-up companies’ initial public offerings (IPO s) being delayed compared to before, mainly in the US, dramatic expansion of corporate value accompanying earnings growth is happening at the unlisted stage; therefore, investment in unlisted companies (private equities) is on the rise worldwide in order to gain large returns during this stage. Horsley Bridge XII Growth Buyout (fund of funds) of Horsley Bridge Partners LLC with which BVAM has a long-standing alliance came to a final close in August 2018 receiving significantly larger investments than initially expected from Japanese investors. Horsley Bridge XIII Venture fund (fund of funds) is scheduled to be launched in May 2019 and is again foreseen to be met with demand exceeding expectations. Furthermore, the VIII Venture fund of Crosslink Capital Inc., an alliance partner since BVAM’s foundation, received the largest and the biggest ever strategic investors from Japan and successfully concluded its fund raising. In addition, Crosslink Capital plans to launch its first growth fund, the Endeavour Fund, in the first half of fiscal year 2019 in order to provide funds for growth that become necessary in the process of business expansion, mainly in the company it invests in. As for BVAM’s bond and multi-asset management services, in fiscal year 2018, although the market became turbulent towards the end of the year, the US Short-Term Government Bond Fund, which invests in high-coupon mortgage securities issued by the GNMA (Government National Mortgage Association) and is managed by INCORE Capital Management under Victory Capital, maintained good performance throughout the fiscal year. In fiscal year 2019 as well, BVAM believes that if credit risks are to rise because of concerns over an economic slowdown, GNMA bonds, which are guaranteed in full by the US federal government, would gain an advantage as an investment target. Additionally, the “Cash Management and AAA Global Balance” series pursuing absolute returns based on quant models are all securing positive returns. In February 2019, BVAM developed a new proprietary quant model that took into consideration not only statistical approaches generally used in quant investments but also investor psychology and supply-demand factors and then started managing a Japanese equity hedge fund with internal funds (seed) using approximately ten models created under different time bases and logic.
BVAM believes that in developing its medium to long-term business organization for the next growth phase, it is critical to cultivate young, bright talent starting their careers at BVAM and, therefore, began in fiscal year 2011 the hiring of new graduates, which is unusual for an independent asset management firm. In April 2019, two new graduates are joining BVAM, making the number of new graduates hired thirteen over the eight years. The recruiting process for fiscal year 2020 is ongoing as well.
BVAM reached a milestone celebrating its 20th anniversary in 2018 and held a 20th anniversary party in October. In fiscal year 2019, BVAM intends to focus on starting its “service that provides its own publicly offered trust offering online” as soon as possible after having been working on the project since last fiscal year to realize “direct communication with individual investors”, which has been BVAM’s dream since its foundation. BVAM will always be grateful for all your support and is motivated to take on the challenge of innovating Japan’s asset management industry as “a transparent investment management company offering services that are of truly high quality”