Short Briefings on Long Term Thinking - Baillie Gifford Where obsession meets opportunity: Japan’s ‘overlooked’ small caps
Japan’s smaller companies represent a “niche and overlooked” asset class, but that’s precisely the growth opportunity, says Brian Lum. The Baillie Gifford investment manager reveals some of the standouts he’s recently met, including a firm using AI to forecast the weather more accurately and another helping people with disabilities get hired.
Background:
Brian Lum became lead manager of Baillie Gifford Shin Nippon investment trust and joint manager of our Japanese Smaller Companies Fund in May. In this episode, he shares stories from a busy trip to the country, his first in his new roles. And he explains why Japan enjoys some of the world’s best conditions to nurture innovative and disruptive growth businesses.
Companies discussed include:
Weathernews – a business safeguarding ships and planes from storms and helping convenience stores anticipate which goods will experience surges in demand.
LITALICO – a firm that specialises in providing training to people with mental and physical disabilities.
Soracom – a company blending generative AI with Internet of Things sensors.
Seria – the retailer obsessing over every detail to make a profit from selling goods for the equivalent of 50p (65 cents).
Kohoku Kogyo – the manufacturer demonstrating high craftsmanship to ensure electric cars run safely and smoothly.
Resources:
Japanese Smaller Companies Fund
Quantum Computing Since Democritus
Short Briefings on Long Term Thinking
Virtual visionaries: Japan’s Cover Corp rules the VTubing realm
Companies mentioned include:
Timecodes:
00:00 Introduction
01:55 Japanese influences
02:25 A focus on smaller companies
03:55 The Galápagos Syndrome
06:25 Learned lessons
08:00 Face-to-face meetings
08:55 LITALICO training workers with disabilities
12:55 Weathernews and climate change
15:00 AI-enhanced weather forecasts
16:35 Soracom mixes generative AI with the Internet of Things
20:40 Seria’s detail-obsessed 100-yen shops
23:15 Kohoku Kogyo’s crafted components
25:30 The long-term perspective
26:30 A niche, overlooked opportunity
28:30 Book choice