Alternative Investment

Japan Fund Manager Mines Online Job Reviews To Pick Investments


One of Japan’s largest asset managers is dissecting online job reviews to identify quality companies and boost investment returns.


Sumitomo Mitsui Trust Holdings Inc.’s asset management arm, which oversees 84.8 trillion yen ($591 billion), is increasingly using such information posted on websites to look for companies with sound governance and work practices, said Munehisa Matsumoto, general manager of the research department.


“Alternative data is helping raise marginal returns,” Matsumoto said in an interview. Comments posted online about jobs and employers help investors find companies with cultural and organizational strengths, which tend to generate better results, he said.


Investment managers worldwide are turning to alternative data, which has become a multibillion-dollar industry after regulatory tightening made it more difficult to gather information using more conventional methods, such as direct communication with companies.


Sumitomo Mitsui Trust Asset Management Co. is one of the few mainstream financial institutions to use such information in Japan, where the uptake has mostly been by hedge funds and other shorter-term investors, according to Masashi Tsujinaka, chief executive officer of Nowcast Inc., an alternative data provider.


Mitsubishi UFJ Trust & Banking Corp.’s asset management division is also studying whether reviews posted at job placement websites can help aid its investment decisions, said Yuichiro Iwata, chief manager of advanced quantitative research and investment.


Sumitomo Mitsui Trust Asset Management examines employees’ comments online about whether they feel motivated or find it easy to work at their companies, among other things, Matsumoto said. While it’s hard to quantify their specific impact on fund performance, job reviews are “working positively,” he added.


“Alternative data are probably usable for long-term or long-only investing since they not only help quicken our analysis but also deepen it,” he said. 


This article was provided by Bloomberg News.

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