Mid-cap stocks often attract relatively little investor attention, creating information asymmetries that the fund seeks to capitalize on to achieve long-term absolute returns, despite being beneficiaries of corporate structural reform and having significant potential for share price appreciation.
Mid-cap stocks are a source of alpha (α)
・Left behind between large and small-cap, mid-cap stocks provide overlooked investment opportunities
・Limited sell-side analyst coverage and participation from deep-dive bottom-up investors
・Decent liquidity with strong corporate fundamentals
Benefits from corporate structural reforms
・Steady progress in improving capital efficiency in terms of ROE and PBR, by the introduction of the Stewardship Code (2014) and Corporate Governance Code (2015), and TSE Initiatives
・Advancement in the unwinding of cross-shareholding with institutional investors emerging as major shareholders. Engagement with companies to improve governance further adds pressure for reform
Investment Process
The fund aims to identify high-quality companies with strong balance sheets and solid profitability whose share prices appear undervalued relative to their cash-generating potential. Focusing on investment themes (catalysts) that can unlock hidden value, the investment universe is narrowed to approximately 600 companies with market capitalizations between 150 billion and 2 trillion yen. Through rigorous fundamental analysis and on-site visits, the fund constructs a concentrated portfolio of 15–25 stocks, held over a 1–3 year investment horizon.
Investment Strategy
Long: Japan Select Value Equity Fund (Inception day: April 1 2025)
The fund seeks to generate long-term absolute returns through a concentrated portfolio of 15–25 mid-cap Japanese stocks, an area often overlooked in the market, by emphasizing “Quality”, “Value”, and “Investment Themes”.
Kenji Kobuse
The “Japan Select Value Equity Fund” is a bottom-up Japanese equity strategy that primarily invests in mid-cap stocks—an investment universe with significant potential for share price appreciation. The strategy is guided by four core principles: value, concentration, pursuit of absolute returns, and active engagement.
The Source of Returns: A Fusion of Global Perspective and Company Insight
Kenji Kobuse’s approach to investing traces back to the late 1990s, when Japan was grappling with corporate restructuring in the wake of the bubble collapse. As a college student, he immersed himself in economic and corporate analysis, developing a deep interest in uncovering the realities behind financial figures.
He began his career as a sell-side analyst covering domestic sectors such as services and transportation, gaining firsthand insight into the structural challenges and growth potential of Japanese companies. Seeking a broader vantage point, he earned an MBA in 2007 and, through immersion in the U.S. investment community, developed a keen understanding of how global investors assess Japanese equities.
Upon completion of the MBA, Kobuse spent approximately 17 years in New York, as a senior analyst at a boutique hedge fund. He refined a distinctive approach that links global macro trends with bottom-up company analysis, conducting more than 150 management meetings annually and emphasizing primary research. Focusing particularly on mid-cap stocks—where growth potential often exceeds market recognition—he generated results through concentrated positions, active engagement, and selective short strategies.
In January 2025, he joined Bayview Asset Management as portfolio manager of the Japan Select Value Equity Fund. Leveraging his global perspective and macro insight, he seeks absolute returns primarily through overlooked mid-cap opportunities, while dynamically allocating across market capitalizations.
His integrated approach—combining analytical rigor, global vision, and disciplined engagement—forms the foundation of his return generation and defines his presence in Japanese equity management.
[Biography] After joining Nomura Securities Co., Ltd. in 1998, he began his career as a sell-side analyst. He later managed a Japanese equity hedge fund for approximately 16 years at Atlantic Investment Management in the United States.
In January 2025, he joined Bayview Asset Management Co., Ltd. and was appointed Portfolio Manager of the Japan Select Value Equity Fund, a position he continues to hold today.
He graduated from the Faculty of Economics, Keio University, in 1998, and earned an MBA from the Massachusetts Institute of Technology (MIT) in 2007. He is a CFA Charterholder. He is a Certified Member of the Securities Analysts Association of Japan (CMA).
