Translate

Friday, January 26, 2018

Friday Feature PM Q&A interview: CAM ESG Fund Franklin Khusman フランクリン・クスマン CAM ESGファンドのファンド・マネージャー

Today, we interview Franklin Khusman, the Portfolio Manager of the Environmental, Social & Governance (ESG) fund at Capital Asset Management K.K. (CAM), a firm focused on equity investments in financial services. In 2017, the CAM group launched a new ESG Fund offering, and it had tremendous success outperforming its peers.(Pictured: Nofil Iqbal left, Franklin Khusman right)


1. When did you start your ESG equity fund? What is the focus of Capital Asset Management, and how have you raised assets under management?

The CAM ESG Japan Fund was created on 27 January 2017, with zero seed money. Right upon inception high net worth individuals recognized its concept & potential, and the fund got immediate funding of US$2Million. In less than 365 days the fund has grown over 300% and with current AUM of over US$7Million+ and growing.

Capital Asset Management K.K. (CAM) business invests on behalf of our clients with expertise predominantly in both Frontier Asian and Emerging Markets. Unlike any other investment firm in Japan, we created and pioneered the first CAM ESG Japan Fund (Equity Mutual Fund). We invest on behalf of our various clients who entrust their savings to us. We recognize the change in landscape where non-financial information is becoming more strategically important than the traditional financial ratios.


CAM (Capital Asset Management K.K.) was founded in Tokyo in 2004, and is currently headed by Eiichiro Tabuchi. We have around 20 unique funds, from a Yield Oriented Health Care REIT Fund to a Frontier Markets Country Fund. As of December 2017 CAM had approximately US$380Million in total AUM (Assets Under Management).

2. Where do you see the opportunity for your firm to grow? Is  there any key ESG advantage you have today in Japan or Asia?

Given that CAM is a boutique asset manager and our funds are purely unique. It would be fair to say that we are almost an exclusive player for both frontier markets and our ESG fund in Japan.

To elaborate; our ESG fund has an annualized return of 28% with a sharpe ratio of 3.1. Further we have created a customized ESG Alpha Strategy Fund that incorporates various hedging strategies, based on investors investment objectives, risk appetite and target return profile. This fund can be fully hedged and has the ability to deliver a reasonable rate of return within an acceptable scope of risk to our client’s advantage.  

In the summer of 2017, Japan’s Government Pension Investment Fund (GPIF) the largest investor in the world, with AUM of US$1.5 Trillion, selected 3 ESG indices as their benchmark. They allocated US$10Billion for preliminary ESG investment. This act of responsible investing will be followed by the respective public sector pension funds, corporate pension funds, and general public the private investors.

3. How do you create such impressive returns? What is your universe and how to do you determine your portfolio holdings?​
The return on our ESG funds is driven by what we call “CAM Sustainable Investment Model” which basically is an integration of combining ESG Score and company’s financial data.

To define; we take the total universe of 3,700 listed companies of Japan. Selecting the top 1,000 companies with ESG criteria, we then do a quantitative analysis and a deep drill for the top 100 ESG companies, eliminating the companies that have the highest potential as "bad actors" or being involved in major scandals in Japan.

The ESG fund has a total of 100 companies (40 from Nikkei 225, and the rest from TOPIX). We do not disclose exact criteria for our profitable filtering system as this remains our in-house intellectual property and trade secret.​

4​. What attracted you to this opportunity to pursue research and then run an ESG fund of corporates in Japan?

I started as Portfolio Risk Consultant in MSCI BARRA, guiding the investment professional in Japan on importance of BETA and diversification through Multiple Factors Risk Model. Moving to Thomson Reuters, I explored the world of ALPHA through work on quantitative analysis, Smart Beta Indices, and set up a Lipper Fund awards for” Japan’s Defined Contribution Category” which has focus for Risk/Return for long term investment.

As for setting up the ESG Fund, my research with ESG content conclude that investing in ESG excellent companies help REDUCE RISK. At the same time the better Governance within those firms lead them towards better performances which convert into HIGHER RETURN.
Peer analysis shows that my approach provides better result, which the management of the firm believes that CAM should introduce the product to the public, and allow them to gain the benefit of ESG investment for long run investment. Further it could be said that the non-financial factors have become more important in corporate analysis; as this is what I know to be the main ESG factors.

5​. Will the corporate governance issues of Japanese enterprises impact the CAM ESG Japan Fund?

The biggest surprise with our first year results came from the impacts of more Japanese corporate scandals than expected. We only factored in 1 or 2 major scandals per year, however in 2017, we experienced 9 in Japan; Toshiba, Nissan Motor, Subaru, Mitsubishi Material, Kobe Steel and the 4 largest construction companies. Let’s hope that we continue to perform at a similar during scandals in 2018. The CAM ESG Japan Fund will not be impacted as we search for alpha within our portfolio via deep drill down quantitative research. We have strong insights from our ESG analysts.

6. Are there project partners or investors that you are searching for at this time for your ESG fund product offered in Japan?

CAM ESG Japan Fund is a regular investment trust developed under supervision of Japan’s FSA. We believe it will be good if the ESG Investment can be made available to wider audience including investors outside Japan.

We are currently looking for partners who can help introduce the variants of CAM ESG Japan Fund within their local jurisdictions.

7. Where do you see your firm growing the most in the next 2-3 years? Will this continue the current focus or change into another new direction?

CAM ESG Japan Fund has 5 years of simulation performance result, and 1 year of actual result (28% returns). Since we have been able to confirm that the actual performance is replicating the result from simulation (between 2012-2016), we are convinced that the current ESG investment process is very solid and it can be used as base for Absolute Return product (ESG Alpha Strategy). We believe that our ESG Alpha derivative products will also become our focus in the next 2-3 years.





If any Japanese or global investors are interested in knowing more track record details about our ESG fund performance, they can contact Nofil Iqbal in English or Japanese for all distribution and marketing enquiries.​ 英語または日本語の電子メールは受け入れられます He can be contacted on LinkedIn or by email at n.iqbal@capital-am.co.jp Full profiles of Capital Asset Management K.K., Franklin Khusman, and Nofil Iqbal, are all available on LinkedIn

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, services and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin or on Twitter. We are the world's #1 recruiter on Twitter, with over 60,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedinまたはTwitterでフォローしてください 世界中のTwitter第1位リクルーター60,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.



    Tokyo                                                                Tokyo
             Mark  Pink                                                  Shinichi Nagasawa
      Direct + 81 3 3505 3891                                       Direct  +81 3 3505 3891
            Email pinkmark@tmjpartners.com                         Email nagasawa@tmjpartners.com

Friday, January 19, 2018

Friday Feature Book Review: The Master Algorithm (AI + Machine Learning) : Pedro Domingos マスターアルゴリズム (AI+ディープラーニング):ペドロ・ドミンゴス

We know that computers are powerful, but we may not know the full power of deep learning or artificial intelligence. It is not just coming in the future, it is here now, and advancing daily. Pedro Domingos explains the 5 main tribes that make up machine learning today. I only thought he would stick to IT, but I was wrong. It is not a dry subject as it is already active in our wider business world today. We use many of these AI algos daily without knowing them by name.

Take your email spam filter. It may seem basic today, but it is based on machine learning. One if these AI tribes believes in knowledge composition. They assume all email is spam. They use rules to confirm this. Is Viagra in the title? then probably spam. is FREE in the title? then probably spam. Is a close friend's name in the message? then maybe not. It is all about probabilities. They make email worthwhile due to these helpful probability filters. Your email spam filter is using AI right now. It is already helping you to focus on what is important for you. It is here and operating in your business right now.

AI is all around us and programmers are trying to figure it out. Your human brain functions a certain way. Why not figure out how exactly? Why not reverse engineer it as a process? Why stop there? Humans have brains, but all animals have evolved, and the planet earth evolved, so why not try to better understand all of evolution? Would that not be a better bigger picture to figure out? This is just one of the many concepts that AI specialists struggle with when the choose what exactly, to focus on.

The Top 5 Takeaways from this book that impact any reader are based on the 5 main tribes within AI. These are just general overviews. Much deeper details are covered in the book. It is explained very well.

1) Symbolists: Try to focus on the problem of knowledge composition. They figure it out with inverse deduction. If 2+3=5, then what is 5-2=? by deducing similar data, you can figure out 3 as an answer. They focus on gaps in knowledge and is the most scientific in approach. The surprise is when algo figure things without a human. A robot called Eve discovered a new malaria drug by itself.

2) Connectionists: Try to focus on the problem of credit assignment. They figure it out with backpropagation. They focus on a more human, less logical world. Neural networks with newly discovered knowledge. When your brain learns, a synapes takes place between neurons. A large 1 billion network of inputs from cat videos on YouTube was the first algo used to recognize the cat content from the network.

3) Evolutionaries: Try to focus on the problem of structure discovery. They figure it out with genetic programming. They focus on genetic coding or genome. The best algos replicate to create child algos made from half male half female algos. New electronic discoveries have been made that could not have been made by humans alone. In fact some of these patents would never have been created by a human.

4) Bayesians: Try to focus on the problem of uncertainty. They figure it out with probability inference. They figure it out with comparisons. If type A people DO like X, and type A people do NOT like Y, then if one type A person DOES like X, another type A may NOT like Y as well, if the likelihood of these comparisons work well. Repeat with millions of cases and you can find this pattern out clearly. Spam filters come from this.

5) Analogizers: Try to focus on the problem of similarity. They figure it out with kernel machines (support vector machines). They figure it out with similar examples. Recommendations systems in e-commerce, where if you buy something, you are also asked to buy other things people with similar tastes also buy.

There are many amazing stories about how AI is changing our lives. Besides spam filters, another widely used concept is the recommendation engine. It may be the most financially successful use of algo yet. When Amazon suggests you buy another book, based on what other similar readers buy, you are using that algo. this is responsible for 33% of Amazon's revenue! Considering the total, that is a big umber. Netflix also uses one and it accounts for 75% of gross revenues. Again, this is a very large number and actively used by millions of customers. There are many ways to understand our brain and the world around us. AI is just the starting point that helps us figure out how exactly, that process can be better understood. Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, services and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Twitter, the world's #1 recruiter on Twitter, over 60,000+ followers already have! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズTwitterでフォローしてください 世界中のTwitter第1位の採用企業60,000以上のフォロワーが既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.



    Tokyo                                                                Tokyo
             Mark  Pink                                                  Shinichi Nagasawa
      Direct + 81 3 3505 3891                                       Direct  +81 3 3505 3891
            Email pinkmark@tmjpartners.com                         Email nagasawa@tmjpartners.com

Friday, January 12, 2018

Friday Feature Book Review: "The Ascent of Money" by Niall Ferguson マネーの進化史 : ニーアル ファーガソン

I love history and finance, and this was both. It was pure pleasure from page one. Niall Ferguson explains both very creatively and amusingly, a very complex journey of how money started out. You learn how it evolved as a means of exchange at first, to the current storage of wealth. We then learn more about its globalized spread as a critical need for use across borders. 

This book and in-depth research has been so popular it also became a BBC documentary series with wonderfully engaging episodes. There were a number of stories in financial history that I had never before encountered, and I liked that historic challenge. Was Forex market making really how the great families in Italy like the Medicis, made their fortunes for example? Our modern day view of banking does seem to have its origins from this point. 


The original word for bank, comes from banco or bench, where the original money changers worked from in Florence. If they went insolvent, they broke their bench, hence the term bankruptcy in English used today. There were so many similar amazing facts about how the world of money started, evolved and later developed. It was a treasure trove of fascinating historical facts like this.

Barter is how we all began, but both coins and currency, have had an amazing change in development over time. This is what the author Niall Ferguson, really helps you to better understand. Bitcoins are just the latest chapter. It is but one of a long list of new products and concepts that sometimes work, sometimes not, but always moves forward. You have to make mistakes in order to learn, and the world's economies are no different. There have been plenty of global mistakes to learn from.


No matter how much you think you know about, there is always something more to add to your knowledge and consider. The world of money is the history of the world's economy, and it is a story that is ultimately never ending. At 400+ pages this book is long and really enjoyable, in a full bodied multi-course dinner kind of way. 

The Top 3 Takeaways from this book that impact any reader are:

1) Rome was the first large system on earth to use a common widely used money. Gold, silver and copper coins originated large distribution across borders from there.
2) Abuse of metal coins came soon after as late stage empire economics had a negative impact across the Roman world.
3) Paper currency may have originated in China, but finding common means of exchange has always been a challenge globally. This is true for many markets, even today with virtual currencies like Bitcoin.

History used to be boring and bland in the hands of many, but this author Niall Ferguson, is different. The author's style is so entertaining that I feared its ending as I ran out of pages left in the book. This is always a very good sign. This book is really focused on the twin subjects of finance & history, if these interest you, then this book is Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, services and anything else with a financial theme.  Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Twitter, the world's #1 recruiter on Twitter, over 60,000+ followers already have! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズTwitterでフォローしてください 世界中のTwitter第1位の採用企業60,000以上のフォロワーが既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.






    Tokyo                                                                Tokyo
             Mark  Pink                                                  Shinichi Nagasawa
      Direct + 81 3 3505 3891                                       Direct  +81 3 3505 3891
            Email pinkmark@tmjpartners.com                         Email nagasawa@tmjpartners.com

Friday, January 5, 2018

Friday Feature Book Review: Goldman Sachs: Culture of Success: Lisa Endlich ゴールドマン・サックス―世界最強の投資銀行 リサ エンドリック

There is always one firm at the top, and right now, it is Goldman Sachs. How do you get there? Is there a shortcut to success? Can a better competitor adapt and overtake it somehow or someway? If there is a way to dethrone the current king of investment banking, it will not be quick. Marcus Goldman, started the firm in 1869 and was joined by a relative Samuel Sachs, soon after in 1882. With more than 147+ years of experience behind them, it did not come quickly.

There is something different about Goldman bankers that is not shared with other firms. It is one of those things that is known, but never easy to explain. It is partly about a level of client connection, and determination. It is a rare combination that is rewarded more often or more clearly than any rival in the industry. Transactions of note include the IPO of Ford Motor Company in 1956, Richard Branson's Virgin Music, and Ralph Lauren's Polo, all firms that were helped with various dealings. As the client grows, so does the service provider. It is a virtuous circle of success.

The term "partner, as in a Goldman Sachs partner" is a rare thing today that is really the epitome of professional success. It is a badge of determination, dedication and wealth that no other investment bank in the world offers to as many as Goldman Sachs does today. In fact, it gives partnerships to any member in any branch anywhere in the world. It is not only for those who stay in New York City. The current list of partners often reflects where financial markets are growing strongest, by helping clients expand and reach new markets. The competition to become a partner is high, but so are the financial rewards. It is literally worth millions of dollars in compensation annually, but only for the few.

As an example of this new internationalism, top earners at a younger than expected age, were given partnership at overseas branches. Oki Matsumoto, worked for the Japan branch and was one of the very first partners to come the region. He represented what could happen to ambitious staffers in any branch on the globe. Back in 1998, when he was just 35, he made partner. The surprise is that he had joined the firm only 8 years before from Salomon Brothers Asia. The Japan bubble was followed by major steps in the UK and Europe, recently China as well. All have grown local Managing Directors who have become Goldman Sachs partners, the ultimate corporate peak.

The Top 3 Takeaways from this book that impact any reader are:

1) Never be in a rush for success. You need to build a solid foundation, before you can grow far and wide. Corporate culture starts with key people. That is how you begin.
2) A great observation is how you can grow a firm based on the clients you serve. Ford Motor Company was small in the beginning, but with help from its investment bank, Goldman Sachs, it grew globally.
3) Winning and losing is very black and white. If you have the capital to take a risk early, do so. You can then learn from mistakes early, pivot and focus on where the true profits can be found. Success is never a straight line.

Since its early international expansion days, many partners from Asia & Japan, have stood out and succeeded.  Many other markets have grown outstanding talent, and have made it to becoming a partner. This firm pays like no other, and this book details so many of the people at its core. The key one who have the drive needed to make it to the very top of finance. If you are a history buff and like finance, this book is for you. highly recommended. Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, services and anything else with a financial theme.  Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Twitter, the world's #1 recruiter on Twitter, over 60,000+ followers already have! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズTwitterでフォローしてください 世界中のTwitter第1位の採用企業60,000以上のフォロワーが既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.





    Tokyo                                                                Tokyo
             Mark  Pink                                                  Shinichi Nagasawa
      Direct + 81 3 3505 3891                                       Direct  +81 3 3505 3891
            Email pinkmark@tmjpartners.com                         Email nagasawa@tmjpartners.com