(Feb 28): A Singapore-based hedge fund that beat the market with a 33% return last year said Suzuki Motor Corp’s robust India strategy will help shelter its portfolio from global trade risks.

The Japanese automaker’s limited US and China exposure means it will probably weather the 25% tariffs that US President Donald Trump vowed to implement, according to Yu Liu, the chief investment officer of Kings Court Capital Pte Ltd. It is also likely to avoid the price war fuelled by the rise of Chinese electric vehicle leaders like BYD Co that has pressured many carmakers around the world. 

“Being a Japanese company listed in Japan but having a very significant profit exposure to India is something that we feel very good about,” Liu, a former auto analyst at Goldman Sachs Group Inc, said on Thursday. Unlike other carmakers, “Suzuki is very loyal to the internal combustion engine and now hybrids. And I do think that in India for the foreseeable future gasoline cars, and hybrids are the main products that will be demanded by consumers.”

Kings Court Capital, which manages US$400 million (RM1.79 billion) and employs a long-short equity strategy, invests about 70% of its portfolio in Japanese stocks and 15% in China. Suzuki, Sony Group Corp and Hikari Tsushin Inc have remained unchanged as the fund’s top-three long holdings over the last two years.

Its 33% return last year compares with a 9.6% gain in the MSCI AC Asia Pacific Net Total Return USD Index, which it uses as a benchmark for performance. Suzuki’s shares have more than doubled since a 2022 low, beating the MSCI world auto benchmark’s 2.9% rise. 

The share price of Suzuki, however, was dented by the news last week that Tesla is preparing to enter the Indian market.

Suzuki’s India unit is the country’s biggest car company by sales and recently started production at its first new plant in eight years, boosting output in a market set to reach the six million passenger vehicles milestone by 2030. 

Liu started Kings Court Capital in 2021 with a classmate from the Wharton School, with the fund name inspired by a dormitory from the college. He has also done portfolio management stints at Millennium Management LLC and Balyasny Asset Management LP. 

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