Up-dated PIRC Recommendation

26 April 2016

ATLANTIS JAPAN GROWTH FUND LIMITED

Up-dated PIRC Recommendation

Atlantis Japan Growth Fund Limited (the "Company") notes that Pensions & Investment Research Consultants Ltd (PIRC), the independent shareholder advisory group, has updated its report following the publication of LIM's letter to Shareholders on 19 April 2016.  In its up-dated report:

·                PIRC notes the Company has "effective discount control mechanisms in place";

·                PIRC is supportive of the lead fund manager change; and

·                PIRC continues to recommend that Shareholders vote against LIM's Resolution.

As announced on 20 April 2016 and 21 April 2016 respectively, Glass, Lewis & Co., LLC (Glass Lewis) and Institutional Shareholder Services, Inc. (ISS), two other independent shareholder advisory groups, have also recommended that Shareholders vote against LIM's Resolution.

The Board also notes LIM's market update on 25 April 2016 and makes the following points:

·                The Company focuses on small and mid-cap stocks, but its investment policy permits it to invest in any Japanese stocks, irrespective of size.  Accordingly, the Company's benchmark is TOPIX, and not the MSCI Japan SMC Index. As LIM stated in its letter to Shareholders, Atlantis Japan has tracked TOPIX over 1 and 3 years and beaten it over 5 years.

·                Recognising there to be room for improvement in the Company's more recent performance, the Board had previously announced a transition towards a change of lead fund manager.  That was before LIM requisitioned the EGM – the requisition simply resulted in the Board bringing forward the date for completing the transition and the appointment of Taeko Setaishi as lead fund manager with effect from 1 May 2016. 

·                LIM has described Ms. Setaishi's existing open-ended fund as having delivered "excellent results".  Ms Setaishi intends to take advantage of the Company's closed-end structure with the objective of providing superior investment returns, relative to her open-ended fund, over the longer term.  According to PIRC, "the appointment of the new lead fund manager is considered appropriate".

·                The Board has been pro-active in tackling the issues of a high discount, low liquidity and a shrinking in size – in particular, introducing:

-            the redemption facility and the discount control mechanism to increase liquidity and maintain an average single digit discount – according to PIRC, the Company "appears to have effective discount control mechanisms in place as, since March 2013, the Shares have traded at an average discount of 8.0%", which is narrower than the average discount for its peer group of 9.5%; and

-            the embedded subscriptions right mechanism as a means for growing the Company (an increase in Share price of just c.3% by 30 September 2016 is expected to lead to a 20% increase in the size of the Company, with similar opportunities to increase the Company's size in each of the next 3 years).

·                The Board provides the breadth of expertise required to run the Company effectively and is being refreshed.  Noel Lamb, Chairman, was appointed to the Board in 2011 and became chairman in 2014.  Philip Ehrmann was appointed to the Board in 2013.  Andrew Martin Smith, who has been a director for 13 years, is retiring at this year's AGM and the Company is using a highly regarded specialist in non-executive director searches to assist it in the process of appointing his successor.

The Board unanimously recommends that Shareholders VOTE AGAINST LIM'S RESOLUTION at the extraordinary general meeting of the Company to be held on 3 May 2016.

Shareholders are reminded that the latest time and date for receipt of completed Forms of Proxy and CREST electronic proxy instructions for use at EGM is 2.30 p.m. on Sunday, 1 May 2016 (the "Voting Deadline"). 

Investors who hold their Shares through a non-discretionary broker, manager or other adviser, or via an execution-only platform, should ensure that they submit their voting instructions to their broker, manager or other adviser, or platform, at least several days in advance of the Voting Deadline so that their votes can be cast on the resolution to be proposed at the EGM.

Noel Lamb, Chairman of Atlantis Japan Growth Fund, said: "On behalf of the Board I'd like to reiterate our recommendation that Shareholders vote against LIM's Resolution on 3 May as it is not in the best interests of Shareholders as a whole.

"We have already taken action to manage the Company's discount.  In 2013, we introduced the discount control mechanism, which has helped limit the Company's discount to an average of 8.0%, notably narrower than the average discount for its peer group of 9.5%.

"In October 2014, we received strong* shareholder support for the introduction of the embedded subscription right mechanism, which provides a platform for us to grow the Company over time.  

"The Board is confident that, with the change of the lead fund manager, the discount control mechanism in place and the continuation vote in 2019, these measures will enable us to further narrow the Share price discount and ultimately grow the Company."

*89.2% of votes cast on the relevant resolution were in favour.

Enquiries

Sue Inglis	Cantor Fitzgerald Europe	T: [phone]
James Alexander	Aravis Partners	T: [phone]
David Masters / Henrietta Guthrie	Lansons	T: [phone] T: [phone]
Cara De La Mare	Northern Trust International Fund Administration Services (Guernsey) Limited	T: [phone] Email: [e-mail]

Notes

A circular explaining the Board's reasons for recommending Shareholders to VOTE AGAINST LIM'S RESOLUTION and containing the notice convening the extraordinary general meeting of the Company, which will be at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH (commencing at 2.30 p.m.), was posted to Shareholders on 7 April 2016.  Copies of that circular are available at www.atlantisjapangrowthfund.com and at www.morningstar.co.uk/uk/nsm.  Words and expressions defined in that circular have the same meanings when used in this announcement.