IN FOCUS: BANDAI NAMCO ‘A HUGE GAMING COMPANY THAT NO ONE HAS HEARD OF’

Japan’s Bandai Namco is the third largest games business in the world, but no one has ever heard of it – something that is typical of investing in the region.

When we bought our stake it had more than a third of its value in cash, which has come down to roughly a quarter. It generates a lot of cash and is very conservatively managed.

The Japanese government is in the process of issuing a corporate governance code that will put pressure on listed companies to look after their shareholders. Companies sitting on large piles of cash will increasingly have to justify the way they work and will have to reinvest in the business or give something back to shareholders. So with Bandai Namco we have a cheap stock that no one has heard of alongside the catalyst for change in Japan’s business culture. It is up by around 30pc in value since we bought it.

It is a major business and you can hold it for a long time. It will hopefully start putting its large stockpiles of cash to better use, which should help to grow the business.

It represents about 0.8pc of the fund, around £3m, and we bought in early 2017. we are able to buy these derivatives quite cheaply.

What have been your best and worst investments?

Our best investment was probably the Swiss franc, which helped to see us through the crisis of 2008. We made a return of around 55pc on that position at a time when stocks were falling by 30pc in some places.

The worst investments are always growth stocks. One we got wrong was Heliocentris, a German alternative fuel provider. We spent a long time engaging with the management, but it eventually went in a different direction to us and we had to exit our position.

How are you paid?

I am a partner in the business and the fund takes a 1pc flat fee. We considered performance fees briefly but decided against them.

What would you have been if not a money manager?

A groundsman in a school – I think I would find catharsis in tending a cricket strip.