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In our first article in a three-part series on shareholder activism in Japan, we reviewed the history and evolution of activism in Japan. Against this backdrop, in our second piece, we now introduce the Japan equity investment team’s approach to engagement and value realization, as illustrated by recent case studies.
Figure 1 is a conceptual diagram showing how we classify Japanese companies into one of three groups (Group A: Quick adopters, Group B: Recent adopters, and Group C: Slow adopters) according to the degree to which they have adapted to reform.
Our engagement efforts cover a comprehensive range of areas that contribute to increasing corporate value, such as shareholder returns, communication with capital markets, and business portfolio management. Where companies have significant areas for improvement (Groups B and C), we often conduct collaborative engagements by leveraging companywide investment resources. In recent years, we have also worked to escalate engagements with some Group C companies, through proxy voting and engagement letters. Our experience over the years has shown that a significant improvement on engagement metrics tends to lead to a revaluation and reassessment of corporate value.
We believe that our engagement success is underpinned by our balance of global scale with regional perspectives and expertise. Below, we outline three key elements that we believe differentiate us, creating a strong foundation for success. (Figure 2).
We believe the rise of shareholder activism in Japan will continue to drive significant opportunities for investors to enhance corporate value through engagement. Ongoing policy support is expected to continue, anchoring the Japanese stock market’s position as a sustainable investment theme.
Shareholder activism in Japan: Integrating ESG within the investment processContinue reading
How to interpret the Bank of Japan’s latest policy shiftContinue reading
Activism – History and evolution in JapanContinue reading
Is the long-awaited change in Japan’s fortunes finally materialising?Continue reading
New BOJ governor: Dove, hawk… or owl?Continue reading
Shareholder activism in Japan: Integrating ESG within the investment process
In the final article within our series on shareholder activism in Japan, ESG Analyst Soo Ho Jung shares how the Japan equity team integrates ESG to help realize value for investors.
How to interpret the Bank of Japan’s latest policy shift
We analyse the wide-ranging investment implications of the Bank of Japan's latest policy shift.
Activism – History and evolution in Japan
Investment Specialist Toshiki Izumi examines the history of shareholder activism in Japan, with particular emphasis on the differences between current and historical attitudes toward activism.
Is the long-awaited change in Japan’s fortunes finally materialising?
Portfolio Manager Dan Maguire explores why Japan may finally be exiting deflation and assesses the opportunities this structural change could create for small- and mid-cap equities.
New BOJ governor: Dove, hawk… or owl?
Investment Director Masahiko Loo and Client Portfolio Manager Jitu Naidu discuss potential implications of the upcoming “changing of the guard” at the BOJ.
Why global investors should watch the Bank of Japan
Macro Strategist John Butler explores why global investors should watch the Bank of Japan and what is likely to happen next.
Could Japan face a UK-style pension crisis?
Investment Director Masahiko Loo explores the risks of Japan facing a UK-style pension crisis and identifies fundamental reasons that make Japanese pension funds inherently less vulnerable.
Bank of Japan policy shift: Waiting for the other shoe to drop?
Client Portfolio Manager Jitu Naidu and Investment Director Masahiko Loo share their take on the consensus view that Japan has reached several key inflection points.