Neuberger Berman adds Japan equity engagement fund to ESG platform

Neuberger Berman is expanding its ESG platform with the addition of a new UCITS fund running the firm’s Japanese Equity Engagement strategy. 

The new fund seeks attractive returns through active engagement and constructive dialogue with Japanese small and mid-cap companies. 

Neuberger Berman has a diversified set of ESG-integrated funds available to international investors, including the Neuberger Berman Emerging Market Debt Sustainable Investment Grade Blend Fund, the Neuberger Berman Emerging Markets Sustainable Equity Fund, and the recently launched Neuberger Berman Global High Yield Sustainable Action Fund.

The Neuberger Berman Japan Equity Engagement Fund will have a bias towards companies with the ‘willingness to change’ and seeks to achieve a better risk-adjusted return relative to its benchmark over the long term. Investing in Japanese-listed firms with a market capitalisation generally lower than JPY 1 Trillion, the portfolio will be highly concentrated and will draw upon the expertise of Neuberger Berman’s ESG investing and global equity research teams. The fund’s high-conviction security selection will be defined by a rigorous three-staged screening and scoring process focusing on quality, governance, environmental, social, and valuation factors.

Tokyo-based Keita Kubota, Head of Japanese Equities at Neuberger Berman, will manage the fund. Kubota, who joined the firm in November 2019, leads a four-member team of experienced portfolio managers with a deep understanding of local businesses. The fund’s core investment team will also be assisted by the newly appointed Director of Japan Investment Stewardship, Kei Okamura, who joined Neuberger Berman in March of this year.

Kubota says: “Corporate governance has never been more firmly on the Japanese government’s agenda, and we are seeing a new level of open-mindedness amongst companies to change and improve. We believe now is the time to find undervalued Japanese equities through using a fundamental research approach with active and constructive engagement. Our team’s local knowledge, coupled with Neuberger’s global equity research expertise, will be key to generating long-term returns for clients.”

Jonathan Bailey, Head of ESG Investing at Neuberger Berman, says: “Following the launch of the NB Global High Yield Sustainable Fund earlier this year, the launch of the Japan Equity Engagement Fund further underlines our commitment to offering clients innovative sustainable investing strategies across asset classes. We believe too few investors are engaging Japanese small and mid-cap companies on material environmental, social and governance topics, which creates a significant opportunity for us to create value and impact for our clients. We are excited that Kei Okamura has joined the firm not only to be central to the investment process of this fund, but also to partner with colleagues on the ESG Investing team around the world. At a time of great economic and social uncertainty, the need for long-term active investors who can exercise judgement around ESG issues has never been greater.”