February 2017
NEWS , Baillie Gifford, the Edinburgh based independent interna- tional asset manager, has appointed Karen See as co-manager of the Baillie Gifford Japanese Income Growth Fund and Felicia Hjertman as co-manager of the Baillie Gifford Japanese Smaller Companies Fund, with immediate effect. Karen will work alongside Mat- thew Brett in managing the Jap- anese Income Growth Fund, fol- lowing its successful growth since launch in July 2016 to assets of over £100m (as at 30 November 2016). Karen joined Baillie Gifford as a graduate from the University of Birmingham in 2012, and has been a member of Baillie Gifford’s Japanese Equities team since she joined the firm. Felicia will join Praveen Kumar as co-manager on the Japanese Smaller Companies Fund, with £300 million of assets (as at 30 November 2016). Felicia gradu- ated from the European Business School, London in 2011, and joined Baillie Gifford that year. She has spent the last two years as part of the Japanese Equities team. James Budden, Director of Retail Marketing and Distribution at Bail- lie Gifford & Co says, “Baillie Gif- ford has a team-based approach to fund management and we see strong merits in the appointment of co-managers across our range of OEICs.” The Baillie Gifford Japanese Smaller Companies Fund’s total assets under management are £299.68 million, as at 30 No- vember 2016. The Fund aims to produce attractive capital growth by investing in smaller Japanese Companies that offer good growth opportunities from innovative business models, disrupting tra- ditional Japanese business prac- tices, or from the growth of Jap- anese companies outside Japan. The Fund has returned 183.2* per cent over the five years to 30 No- vember 2016. Baillie Gifford employs over 900 people and has assets under management and advice of over £147 billion as at 30 September 2016, of which around £6.5 bil- lion is managed by the Japanese Equities team. An asset man- agement firm founded in 1908, it is headquartered in Edinburgh where most of its staff are based. The share price of these two funds can be volatile due to movements in the prices of the underlying holdings and the basis on which the funds are priced. Investment markets can go down as well as up and market condi- tions can change rapidly. The value of an investment and any income from it can fall as well as rise and investors may not get back the amount invested. Changes in the rates of exchange may cause the value of invest- ments in overseas assets, priced in foreign currencies to go down. Past performance is not a guide to future performance. *Performance source: FE, single pricing basis, total return. B-Acc shares. ed a huge opportunity for South and Southeast Asia increase its base load capacity using gas. Furthermore, the push towards delinking natural gas price from crude oil price could help develop- ment of Asian gas market, in the long run. There are signs of this already impacting the coal power plant industry, with 25% less coal capacity likely to be added in 2017 across China, India, Vietnam and Indonesia than in 2016. Distributed Generation In- vestments will be driven by Local Government Initi- atives Despite the likely reduction of feed-in-tariff support in many countries including Australia, Japan, Philippines etc., Frost & Sullivan is forecasting a healthy growth for renewable technol- ogies lead by solar PV at about 17.8% in 2017. Initiatives by the local governments to increase the access and quality of power supply, to both residences and industries, is aiding the growth of a range of distributed energy technologies such as biomass, solar PV, microgrids and small temporary power plants. The total distributed energy market is likely to be US$18.36 billion in 2017 in Asia Pacific representing a 14.0% year-on-year growth. Investment in Distribu- tion Grid Automation will Increase, even while the Smart Meter Market Slows Down In Asia With nearly US$137 billion likely to be invested, the transmission and distribution sector will pres- ent the largest opportunity for power equipment majors, in an otherwise lacklustre convention- al power industry. With China’s rollout of smart meters having peaked, the market will depend on Japan’s ongoing implemen- tation. Countries such as China, Japan, India and Thailand are also investing significantly in large distance ultra-high voltage transmission capacity to balance the grid, with increasing share of renewable energy. China’s 13th Five Year Plan Offers Major Stimulus for Energy Storage Adoption Even though Asia Pacific region is home to largest number of battery manufacturers, their adoption for utility energy storage application has been lagging behind North America and Europe. However, China’s ambitious drive for lever- Baillie Gifford Appoints Co- Managers to Japanese Income Growth and Japanese Smaller Companies Funds N aging energy storage to effective- ly integrate its large intermittent renewable resources, as a part of its 13th five-year plan, will offer major stimulus to the Asian mar- ket. Numerous demonstration projects in Australia, India and Ja- pan will make 2017 a turning point with innovative applications and business models being explored. Edge Analytics and Cloud Adoption to drive the de- mand for Critical Power In- frastructure Critical power and cooling in- frastructure for data centres will witness 8.2% growth in 2017. Security concerns, both cyber and physical, will further increase spending in advanced infrastruc- ture management. Increasing connectivity and growing adop- tion of mobile applications in banking, travel and social media will drive the demand for cloud and edge analytics, thus propel- ling the overall data centre critical infrastructure market. Digital Transformation of Homes and Buildings Mar- ket The biggest beneficiary of ongoing global trend of digital transforma- tion will be the homes and build- ings sector in Asia. Proliferation of competitive energy management technologies will be aided by the use of cloud and open platform building management solutions (BMS). Facility Management com- panies will move into new service frontiers by acquiring and engag- ing in partnership with niche infor- mation technology players. With the availability of cheap and us- er-friendly devices for home auto- mation, the smart home market is expected to show a strong growth in China, South Korea and Japan. Reducing Non-Revenue Wa- ter will remain Key Focus for the Water Industry The issue of resources and reve- nue leakage continues to plague the water sector across most of Asia. This will remain a ma- jor investment opportunity, with adoption of digital technologies like sensors and smart meters, helping to solve the problem to some extent. Indonesia’s ambi- tious plans to restructure its water sector and attract US$25 billion in potential investments would very much depend on the actu- al ground level implementation. Lack of financial prudence, polit- ical interference and policy flaws could potentially derail the plan, if these issues are not addressed.
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