During the recent stock market turmoil in Japan earlier this month, activist investors capitalized on the situation to enhance their positions, aiming to exert more influence over a variety of companies spanning from pharmaceutical firms to construction businesses. Funds associated with notable Japanese activist investor Yoshiaki Murakami, Tokyo’s Strategic Capital Inc., and the UK’s Nippon Active Value Fund Plc were among the entities that bolstered their holdings amidst the August 5 sell-off, as indicated by filings submitted to Japan’s Ministry of Finance. Collectively, they acquired 2.8 million shares, marking the most significant increase in at least 60 days, in companies such as Sumitomo Mitsui Construction Co. and automotive retailer Yellow Hat Ltd.
Activist investors have been intensifying pressure on Japanese corporations to enhance shareholder returns, aligning with the objectives of the nation’s policymakers who strive to enhance the appeal of domestic stocks to global investors. The activists’ readiness to purchase shares during Japan’s most substantial stock market decline since October 1987 on August 5 demonstrates their willingness to undertake substantial risks to bolster their stakes in target companies.
Describing activist funds as contrarian value investors, Masatoshi Kikuchi, Pan-Asian Chief Equity Strategist at Mizuho Securities Co. in Tokyo, suggested that “they probably thought the rout was the best buying opportunity.” Traders are monitoring funds with established track records like Murakami’s and 3D Investment Partners, anticipating additional upside potential following the expansion of their holdings.
Additional activist funds that augmented their shareholdings on August 5 include Effissimo Capital Management and 3D Investment Partners, both headquartered in Singapore, along with US-based Dalton Investments, according to the filings.
As per regulations, shareholders holding over a 5% stake in a company must file a report when their holdings experience a change exceeding 1%. These filings are limited to the past 60 days, offering insights into recent shifts in ownership and investment strategies.
