Lazard AM Expands its Strategies in Spain and Portugal with a Japanese Equity Fund

Lazard Asset Management has announced the registration of its Lazard Japanese Strategic Equity Fund in Spain and Portugal. This move broadens the firm's range of investment strategies available to investors in these regions.

Fund Overview and Investment Approach

The Lazard Japanese Strategic Equity Fund, now registered with the regulatory bodies CNMV and CMVM, aims to capitalize on potential returns offered by Japanese companies across various market capitalizations and sectors. Launched in 2006, the fund follows a long-term investment horizon employing a bottom-up approach focused on fundamental value and a contrarian strategy to identify undervalued companies, with the goal of outperforming the Tokyo Stock Price Index (TOPIX).

The fund's diversified portfolio, actively managed by a seasoned team including June-Yon Kim, Matthew Bills, and Scott Anderson, typically consists of 20 to 30 Japanese equities selected from a universe of approximately 3,000 listed securities. The investment strategy remains agnostic to any particular sector, instead targeting companies with asymmetric risk-return profiles and significant upside potential.

Domingo Torres' Insight and market outlook

According to Domingo Torres, director at Lazard Fund Managers for Spain and Portugal, the recent attention drawn towards Japanese equities reflects their compelling prospects. Torres highlights Japan's ongoing structural transformation, fueled by corporate reforms initiated over a decade ago, alongside macroeconomic trends such as transitioning from deflation to moderate inflation. Despite these positive developments, Torres believes that long-term valuations have yet to fully capture Japan's investment potential, positioning the country as an attractive market for investors.

ESG Engagement Approach

In alignment with the unique corporate culture and history of Japan, the Lazard Japanese Strategic Equity Fund fully integrates Environmental, Social, and Governance (ESG) criteria into its investment approach. The fund operates under Article 8 of the EU Regulation 2019/2088, emphasizing sustainable finance disclosure requirements.

The fund's management team recognizes the significance of behavioral shifts in driving investment returns relative to static ASG metrics. By incorporating ASG considerations into valuation metrics, the team seeks to leverage changes in behavior to enhance investment performance, reflecting a nuanced understanding of sustainable investing principles.

Lazard Asset Management's introduction of the Lazard Japanese Strategic Equity Fund in Spain and Portugal underscores the firm's commitment to providing investors with diverse and compelling investment opportunities. With its focus on Japanese equities and integration of ESG principles, the fund seeks to capitalize on the long-term growth potential of the Japanese market while aligning with sustainable investment objectives