The Atlantis Japan Growth fund has narrowly avoided restructuring or liquidation at an extraordinary shareholders meeting this week.
Votes in favour of the resolution, put forward by hedge fund LIM Advisors, sat at 43.7 per cent.
LIM Advisors issued a letter to shareholders on 19 April, raising concerns about the fund’s underperformance compared to the MSCI Japan SMC Index, the fund’s high discount, its low liquidity and its shrinking size. It also raised corporate governance concerns regarding the long tenure of several board members.
In response to LIM Advisors’ criticisms about the fund’s performance, the board issued a statement, ahead of yesterday’s meeting, saying that the company’s benchmark was Topix, not the MSCI Japan SMC Index. The fund has tracked Topix over one and three years, and beaten it over five years.
The fund delivered -1.3 per cent for the past year, 24.1 per cent over three years and 84.9 per cent over five years, according to FE Trustnet.
Taeko Setaishi was appointed fund manager, effective 1 May, to appease concerned shareholders.
In a statement following yesterday’s meeting, the fund’s chairman Noel Lamb says its largest shareholders had voted against the resolution.
“We would ask all shareholders to respect the outcome of the meeting and allow us to continue to implement our strategy for improving the company’s performance, further narrowing the share price discount and growing the company over the next three years,” he says.
“Shareholders will be given the opportunity to vote on whether or not the company should continue at the AGM in 2019. In the meantime, on behalf of the board, I’d like to reaffirm our commitment to maintaining a regular dialogue with shareholders and to acting in the best interests of shareholders as a whole.”