PHILOSOPHY

THE TANTALLON JAPAN FUND

The Tantallon Japan Fund is a long bias, value driven Long/Short Fund investing in Japan. The Fund may also invest in listed companies located outside Japan who conduct significant business or compete against Japanese companies.

The Fund typically invests in companies with a market capitalization over US$1.5 billion or more. It runs a concentrated portfolio with the top 10 holding typically accounting for 25-50% of NAV. The maximum number of long positions is 50. Both the short- and the long book are structured as profit centers. Gross exposure typically is around 150-160% and net exposure should typically be around 80-90%. However, no specific net exposure level is targeted. The fund seeks to preserve capital, control risk and add alpha by actively using index future and options, depending on market conditions.


The investment process is a combined top-down and bottom-up discipline. Japan-specific macro trends are matched against Asia and global industry dynamics. Then the Japan corporate universe is scrutinized for the best investment opportunities to reflect these themes. The investment team is very focused on company visits and pro-active contact with management. Rigorous scrutiny of cash flow generation, return on invested capital and scenario analysis is an integral part of the portfolio construction process. Analysis of global and domestic flow of funds is also part of the process.