TOKYO: Activist investors’ infatuation with Japan has reached record levels. So has their influence.
The funds have bought at least one trillion yen worth of Japanese stocks this year, according to data compiled by Bloomberg Intelligence.
Even after taking into account the deals they exited, their net buying is likely to be more than 500 billion yen, according to Bloomberg’s analysis of the data.
That makes them the largest purchasers of the country’s equities after companies doing stock buybacks.
Led by foreign funds, including Elliott Investment Management and Oasis Management Co, as well as Japan-specific investors such as Yoshiaki Murakami, activists have taken stakes in at least 146 companies. They have successfully demanded disposal of real estate, changes in strategy and stock buybacks.
In contrast, Japan’s lenders, insurers, trust banks and retail investors have all been net sellers this year.
“They are playing a positive role in changing corporate managements’ mindset from ‘No. We don’t have any problems’ to ‘yes, there are challenges’,” said Kazuhiro Toyoda, head of Japanese equities at Schroder Investment Management.
The impact from activists on companies’ share prices plays a role in his own investment decisions, he said.
The investment figures compiled by Bloomberg only include the stakes that the activists have publicly disclosed, meaning the real scale of their activities is almost certainly higher.
Foreign investors as a whole have bought only a net 400 billion yen of cash Japanese equities so far this year, separate data from the Tokyo Stock Exchange (TSE) showed.
The TSE data is more granular than Bloomberg’s activist data, meaning the two sets are not fully comparable.
Japanese institutional investors have been net sellers as they unwind cross-holding shares while individual investors have maintained their staunchly contrarian stance, selling into any market rallies. — Bloomberg
