Activist hedge fund battles year-old firm to ditch low-return ventures | The Japan Times
One of those funds is an activist fund personally managed by Abe which has of the economic policies being pursued by Prime Minister Shinzo Abe? If we disapprove at the annual shareholder meeting to something on the. Business in JapanMeet Shinzo Abe, shareholder activist. At last Japan has introduced corporate-governance reforms that will make a. For prime minister Shinzo Abe, the emergence of these new market players could Shareholder activism still has a mixed record in Japan, however, the re- election of directors if the company's ROE fails to meet 8 per cent.
Activist hedge fund battles 144-year-old firm to ditch low-return ventures
My advantage is clear: With the help of others I try to develop slowly, with the hope that we can build something unique. During my time with Soros, he said Japan is the bank for the world, meaning the source of liquidity.
That position was taken by the U. During certain periods of time it was taken by China. There is always a source of liquidity. One of the big themes that I have now is that Japan will lead the liquidity creation process again.
What was the reason for this strategy? Actually, we did it before. Starting in I came up with this idea to do relational investing, to have more of a dialogue with the companies that we invest in. An example is a company called Shimano. Shimano really liked our idea. At that time he had million shares outstanding which he reduced to 90 million through share buybacks. Actually he wanted to do it but he needed someone to back him up. It worked if you look at the share price of Shimano.
They cannot mess me around easily because I am also the CEO of a listed company. Abenomics is a catalyst, though I was already preparing for activism as the trend that I observed convinced me that it would be accepted by the market.
You mentioned Abenomics as a catalyst. What is your view of the economic policies being pursued by Prime Minister Shinzo Abe? We have had deflation for more than 20 years, and in that environment cash is king, so the collective decision made by Japanese individuals was right. Prime Minister Abe understands this chronic disease of deflation is serious.
For the aged population, deflation is not that uncomfortable because many of them live on their pension. But price increases are a threat to them, and that is exactly what will happen. So the Japanese public will have to do something. What Japan should do is to improve the productivity of capital that we entrust to companies. Many companies do not care about their return on equity. However, Abenomics has pointed out that return on equity should be a focus.
What level of return on equity would be acceptable for Japanese companies to target? However, corporates say in free markets the government should not intervene.
Activist investors' focus on returns unsettles Japan CEOs
There are many companies building very small kingdoms for themselves! Not even an empire, but just a small village. The village head has all his board members supporting him, so no one bothers to challenge. Look at the changes in the United States. This view that bonds are safer than equities is very wrong because real cash is generated only by business.
So at the beginning of the s this huge shift from savings to investment took place in the States. What kind of companies are you looking for and how does your activism work? The companies generally have huge cash, sometimes more than their market cap.
Tensions increased further when it emerged that the key shareholder refusing to support Mr Murakami was the enigmatic Singapore-based fund, Effissimo Capital, which now holds a 36 per cent stake in Kawasaki Kisen. Some 14 months after the introduction of a corporate governance code in Japan, Mr Murakami is not alone. Chief executives are increasingly finding themselves under attack from previously little-known activist funds. Bloomberg For prime minister Shinzo Abe, the emergence of these new market players could be a vote of confidence from investors on his governance campaign.
But longstanding investors in the country worry that hostile activism could once again prompt Japanese businesses to shun engagement with shareholders. Itochu quickly disputed the allegations, saying the deal was properly accounted for.
Sparx’s Shuhei Abe on Shaking up Japan Inc. - Barron's
But the damage had been done. Itochu shares dropped 7 per cent and Goldman Sachs this week cut its month target price by 18 per cent.
Advertisement Shareholder activism still has a mixed record in Japan, however, highlighted by the struggles of overseas funds such as Steel Partners and The Children's Investment Fund in the early to mids. Nevertheless, the emergence of Effissimo, in particular, has invoked fresh discomfort among Japanese CEOs.
Effissimo was founded in by former colleagues of Yoshiaki Murakami - Japan's most notorious shareholder activist who was convicted of insider trading. It appears to have plenty of backing, having won investment mandates from pension funds such as Canada Pension Plan Investment Board, and university endowments.
Over the past three years, it has built sizeable stakes in Kawasaki Kisen, office equipment maker Ricoh, Dai-ichi Life Insurance and Apple supplier Japan Display - but little else is known about the media-shy investment fund.