Fair Trade (Excerpt from Value Investor Insight Apr. ’17)

Investor Insight - Jiro YasuValue Investor INSIGHT

Jiro Yasu of VARECS Partners describes why capital allocation at Japanese companies is often abysmal, the extent to which that’s changing, key lessons learned from First Eagle Investment’s Jean-Marie Eveillard, why he has the perfect name for a value investor, and what he thinks the market is missing in Medikit, EM Systems and CRE Inc.

After 10 years working in New York, much of that at First Eagle Investment Management, Jiro Yasu returned home to Tokyo in 2005 to take over his family’s brokerage business. Pivoting from that long-held plan, however, he decided the family should sell the brokerage and that he would instead start a value-investing firm, co-founding VARECS Partners in 2006.Read More >

Necessity is the Mother of Invention Vol. 2 – “Why are Japanese Companies So Cheap?”


We love to meet foreign value managers. We are often impressed by their global view, deep knowledge of many different industries, and their unique take on Japanese companies. Also, they speak the same language as us. We cannot find many Japanese market participants who speak the language of value investing. So, by talking to them, we feel less lonely as value investors in Japan.

Over the last few months, we had the opportunity to meet with several such managers, from both large firms and smaller boutiques. Although they each have slightly different investment philosophies, all of them believe that investing in carefully selected Japanese companies will generate strong returns going forward because of low valuations despite the high quality of the businesses. Read More >

Necessity is the Mother of Invention


In September 2013, I visited the 150-year-old sake brewer Fujii Shuzo, in Takehara city, an old town in Hiroshima prefecture. Ryusei, Fujii’s premium sake, is carefully hand-brewed without the use of chemicals and is known as one of the best sakes in Japan. A couple of months later my family ended up buying Fujii but at the time of my first visit, I had no idea it was even for sale.

There are about 1,600 sake brewers in Japan. Usually buying a sake company is virtually impossible. Most are owned by wealthy and respected families in the region. Fujii’s 150- year history sounds long by most standards but it is still quite young for the sake industry. Nakashima Shuzo, a sake company in the Gifu prefecture, has an over 300 year history.  Read More >