Sebastian Thomas of U.S.-based Voya Investment Management said Japanese equity market liquidity is a barrier to investment by large funds. He expects Kioxia Holdings' U.S. listing, if realized, could enhance its appeal as an investment.
The approximately $14 billion Global AI Strategy fund, which specializes in artificial intelligence (AI)-related investments, currently has approximately $5 billion in assets from Japanese investors, but does not hold Japanese equities. The fund is interested in Japanese companies, but liquidity was identified as the biggest barrier to making an investment decision.
Japan is home to many interesting companies involved in the AI supply chain, but finding companies that meet the fund's liquidity requirements is a challenge, the interviewee said. Kioxia is preparing for a U.S. listing, and the possibility that trading could begin on the U.S. market may influence investment decisions.
Voya has previously invested in Japanese semiconductor equipment manufacturers and is currently researching Advantest and Kioxia. However, it emphasized that ease of trading is important when managing a fund with approximately $1.4 billion in assets.
The fund has partnered with Sumitomo Mitsui DS Asset Management, and its cumulative return reached approximately 600% this month, as it marks its 10th anniversary. Alongside AI infrastructure companies such as NVIDIA, the fund identified companies across a broad range of sectors, including pharmaceuticals, financial services and healthcare, that stand to benefit from AI as potential investments.