Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.</p><p>UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.</p><p>Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.</p><p>Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.</p><p>German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.</p><p>Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.</p>

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Simplex Holdings / Equity Capital Markets

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<p>Simplex Holdings’ shareholders raised around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.</p>
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<p>We have looked at the company’s past performance in our earlier notes:</p>
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<ul>
<li>
<a href="https://www.smartkarma.com/insights/simplex-holdings-pre-ipo-steady-topline-growth-but-appears-to-be-at-peak-margins" target="_blank" rel="noopener">Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins</a> and  </li>
<li><a href="https://www.smartkarma.com/insights/simplex-holdings-pre-ipo-peer-comp-valuation-lagging-in-size-but-leading-in-growth-and-margins" target="_blank" rel="noopener">Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins and</a></li>
<li><a href="https://www.smartkarma.com/insights/simplex-holdings-ipo-valuation-looks-ok-past-performance-will-weigh-on-sentiment" target="_blank" rel="noopener">Simplex Holdings IPO - Valuation Looks Ok, past Performance Will Weigh on Sentiment</a></li>
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<div>
<p>In this note, we'll look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
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Simplex Holdings’ shareholders raised around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.


We have looked at the company’s past performance in our earlier notes:




Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins and  
Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins and
Simplex Holdings IPO - Valuation Looks Ok, past Performance Will Weigh on Sentiment



In this note, we'll look at the deal dynamics and provide a table with implied valuation at different share price levels.


Simplex Holdings IPO Trading - Listing Round 2

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>On 9 September, <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> announced they would launch a Tender Offer at ¥2,000/share to acquire 27.68% of <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> to take them to 48.00%. This was discussed in <em><a href="https://www.smartkarma.com/insights/sbi-8473-launches-a-hostile-tender-offer-on-shinsei-bank-8303" target="_blank" data-smartkarma-citation="insights:57426" rel="noopener">SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!</a> </em></p><p>After the weekend had passed, there was news that Shinsei was looking for a white knight, and the Board would meet this past week to discuss a poison pill warrant issuance. This was discussed in <a href="https://www.smartkarma.com/insights/shinsei-looks-to-a-poison-pill-but-probably-not-really" target="_blank" data-smartkarma-citation="insights:57630" rel="noopener"><em>Shinsei Looks To A Poison Pill, But Probably Not Really</em></a> on 14 September. </p><p>During the week, there were suggestions from the Nikkei that Shinsei had approached <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> and <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and possibly a "rehabilitation fund" to be white knights. The two corporates already own banks but are <em>relatively </em>and<em> highly</em> independent from bank-led <em>keiretsu</em> affiliations and associations, and the rehabilitation fund would almost necessarily be independent.  Shibata Hisashi, the head of the Regional Banks Association of Japan said on the 15th in a press conference that hostile takeover bids for regional banks were not the preferable outcome because they can unsettle customers and business partners within their region. </p><p>On 16 September, Shinsei released a long <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210916_Announcement_e.pdf" target="_blank" rel="noopener">report</a>, suggesting SBI's account of the relationship to date had been "inaccurate" or "insufficient" and proceeded to clarify things. SBI had said their proposal for a capital and business alliance in September 2019 had been ignored but Shinsei explained the reason for the rejection, and said that SBI accepted it at the time. Shinsei said they had not received a subsequent proposal (despite SBI saying they had made proposals on a continuous basis). Shinsei appears to correct the facts about the Monex tie-up. The details are somewhat eye-opening. </p><ul>
<li>SBI had proposed it buy up to 48%, then have Shinsei buy back shares from the market to reduce the percentage of general shareholders holding shares. When SBI and the government together owned 90%, they would squeeze out minority shareholders. After doing so, they would repurchase shares held by the government [unspoken is that it would happen at a higher price]. </li>
<li>The Board of Shinsei noted that without control, synergies would not have been meaningful, and buying out minorities at a price lower than the government posted logistical and governance problems. </li>
<li>Furthermore, Shinsei's clarification of the Monex situation seems to not jive with SBI's claims. </li>
</ul><p>There will always be a "he said, she said" problem where context, perceptions, and explanation do not match, but when they do show up, one side often gets the worse public perception because of the method and timing of presentation. </p><p>On the 17th September, <strong>Shinsei <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917_Announcement2_e.pdf" target="_blank" rel="noopener">announced</a> that it "reserved" its Target Opinion</strong> on the SBI Tender Offer based on having sent SBI questions but having not received answers yet. </p><p><strong>Shinsei also <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917_Announcement1_e.pdf" target="_blank" rel="noopener">announced</a> the introduction of Takeover Defense Measures via Poison Pill</strong><strong>Shareholder Rights</strong> (56 pages) to be introduced at an EGM, also <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2021/210917_Announcement3_e.pdf" target="_blank" rel="noopener">announcing</a> that the Record Date would be 13 October (and an official announcement would be made 28 September.</p><p><strong>SBI provided an <a href="https://www.sbigroup.co.jp/news/2021/0917_12649.html" target="_blank" rel="noopener">initial response</a> (in Japanese)</strong> saying that the Tender Offer was long enough, and that the Shinsei request for an extension was only a tactic to waste time, and warned they may be required to withdraw the Tender Offer under certain circumstances.</p><p>That sets the stage we discuss more fully below.</p>

On 9 September, SBI Holdings (8473 JP) announced they would launch a Tender Offer at ¥2,000/share to acquire 27.68% of Shinsei Bank (8303 JP) to take them to 48.00%. This was discussed in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! After the weekend had passed, there was news that Shinsei was looking for a white knight, and the Board would meet this past week to discuss a poison pill warrant issuance. This was discussed in Shinsei Looks To A Poison Pill, But Probably Not Really on 14 September. During the week, there were suggestions from the Nikkei that Shinsei had approached Seven &amp; I Holdings (3382 JP) and Sony Corp (6758 JP) and possibly a "rehabilitation fund" to be white knights. The two corporates already own banks but are relatively and highly independent from bank-led keiretsu affiliations and associations, and the rehabilitation fund would almost necessarily be independent.  Shibata Hisashi, the head of the Regional Banks Association of Japan said on the 15th in a press conference that hostile takeover bids for regional banks were not the preferable outcome because they can unsettle customers and business partners within their region. On 16 September, Shinsei released a long report, suggesting SBI's account of the relationship to date had been "inaccurate" or "insufficient" and proceeded to clarify things. SBI had said their proposal for a capital and business alliance in September 2019 had been ignored but Shinsei explained the reason for the rejection, and said that SBI accepted it at the time. Shinsei said they had not received a subsequent proposal (despite SBI saying they had made proposals on a continuous basis). Shinsei appears to correct the facts about the Monex tie-up. The details are somewhat eye-opening. 
SBI had proposed it buy up to 48%, then have Shinsei buy back shares from the market to reduce the percentage of general shareholders holding shares. When SBI and the government together owned 90%, they would squeeze out minority shareholders. After doing so, they would repurchase shares held by the government [unspoken is that it would happen at a higher price]. 
The Board of Shinsei noted that without control, synergies would not have been meaningful, and buying out minorities at a price lower than the government posted logistical and governance problems. 
Furthermore, Shinsei's clarification of the Monex situation seems to not jive with SBI's claims. 
There will always be a "he said, she said" problem where context, perceptions, and explanation do not match, but when they do show up, one side often gets the worse public perception because of the method and timing of presentation. On the 17th September, Shinsei announced that it "reserved" its Target Opinion on the SBI Tender Offer based on having sent SBI questions but having not received answers yet. Shinsei also announced the introduction of Takeover Defense Measures via Poison PillShareholder Rights (56 pages) to be introduced at an EGM, also announcing that the Record Date would be 13 October (and an official announcement would be made 28 September.SBI provided an initial response (in Japanese) saying that the Tender Offer was long enough, and that the Shinsei request for an extension was only a tactic to waste time, and warned they may be required to withdraw the Tender Offer under certain circumstances.That sets the stage we discuss more fully below.

Shinsei To Launch a Poison Pill; SBI Plays Coy, So We Wait

<div><p>PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).</p></div><div><p>PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).</p></div><div><p>We have covered the main aspects of the deal in our earlier notes<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-many-companies-rolled-into-one" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Many companies rolled into one and </a><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Peer Comparison.</a></p></div><div><p>In this note we will talk about valuation.</p></div>

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).We have covered the main aspects of the deal in our earlier notes PHC Holdings Pre-IPO - Many companies rolled into one and  PHC Holdings Pre-IPO - Peer Comparison.In this note we will talk about valuation.

PHC Holdings Pre-IPO - Thoughts on Valuation

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Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

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Japan

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

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Simplex Holdings IPO Trading - Listing Round 2

Simplex Holdings’ shareholders raised around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the...

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Shinsei To Launch a Poison Pill; SBI Plays Coy, So We Wait

Shinsei announced Friday it would later announce a Poison Pill at end-Sep, followed by an EGM Record Date in mid-Oct. This is setting up to go full...

Travis Lundy

PHC Holdings Pre-IPO - Thoughts on Valuation

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is...

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Granite Bay Capital

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