【5 min SPARX:For the third quarter of fiscal year 2018】
For the third quarter of fiscal year 2018, Base Earnings which indicate the sustained and stable fundamental profitability of the company, increased 10% on an annual basis despite the decrease of operating profit at 44.2% from the previous third quarter. The primary reason for the decrease in operating profit was an 82% decrease in the amount of performance fee compared to the previous third quarter.
On the other hand, there was an increase of Base Earnings due to increase of AUM for Japanese publicly offered investment trust which has higher management fee rate than SPARX average fee rate.
SPARX is constructing its business portfolio that is insusceptible of equity market's volatility by diversifying and integrating its investment operation while SPARX's investment philosophy is shared broadly (among the team).
In fact, the equity market has been unstable for a while; however impact on SPARX's performance has been relatively small by the market condition compared to the past. As a result, SPARX believes that the company is building solid ground and it has been improving and steadily growing the Base Earnings.
In Japanese Equity Investment Strategy, high management fee rate of Japanese investment trust is favorably increasing despite a large redemption from an overseas institutional investor.
Other than Japanese Equity Focus All Cap Strategy which continuously grows its AUM, Japanese Equity Market Neutral Strategy is also steadily growing. This operation started this fiscal year and continuously performed favorably despite the current challenging market conditions.
Asian Equity Investment Strategy started the operation for individual investors in Japan, such as publicly offered investment trust which invests in listed companies in Asian region including Japan, and publicly offered investment trust which invests in dedicated Korean companies.
SPARX aims to expand the business by gathering all investment intelligence across oversea office locations.
In terms of investment in Renewable Energy Generating Facilities, Mirai Renewable Energy Fund is established with Toyota Motor Corporation, Chubu Electric Power Co., Inc., Sumitomo Mitsui Banking Corporation, and Mizuho Bank, Ltd. and it has begun the operation since November 2018, with the fund size of 30 billion yen.
SPARX intends to continuously involve in the development projects regarding renewable energy generating facilities, as well as to acquire existing established renewable energy generating facilities. Moreover, we will keep seeking investment opportunities in infrastructures by utilizing our expertise even under tighter FiT system.
Lastly, Mirai Creation Fund I, which targets global private venture capitals, reached AUM of 36.7 billion yen, and executed last investment. Mirai Creation fund II began its operation and SPARX aims to expand the fund size to 100 billion yen.
SPARX continuously aims to execute investments (that accelerate innovation, and realize the potential of technologies and ideas that can transform the future by promoting them on a global scale) for Mirai Creation fund and consequently SPARX wishes Mirai Creation fund to be recognized as one of Japan's leading venture funds in both name and reality.