: Japan Activists Face New Challenge: Success
- Shareholder activists in Japan, once stymied by cultural and legal barriers, are now grappling with a novel issue: the consequences of their own success.
- Some activist funds specializing in Japan have generated annualized returns of 20 to 30 percent over the past five years, according to sources familiar with the matter.
- "All the big endowments and pension funds, in the US and elsewhere, have taken positions in the biggest activists in Japan and they have gotten so big that...
Japanese Activist Investors Face New Challenge: Success
Shareholder activists in Japan, once stymied by cultural and legal barriers, are now grappling with a novel issue: the consequences of their own success. As Japan’s stock market reaches record highs and buyout activity surges, activist funds are finding it increasingly tough to deploy capital effectively.
Some activist funds specializing in Japan have generated annualized returns of 20 to 30 percent over the past five years, according to sources familiar with the matter. This growth has led to larger fund sizes, creating challenges for future investments.
“All the big endowments and pension funds, in the US and elsewhere, have taken positions in the biggest activists in Japan and they have gotten so big that the question now is how that size plays out,” said a senior investor in Tokyo. “As they grow up they have to do bigger things.”
This situation represents a significant shift from the past. In 1989, T Boone Pickens, a Texan oilman and activist investor, acquired a 20 percent stake in a Japanese automotive lighting company and sought board representation and increased returns. He described the endeavor as a learning experience.
“It’s going to be a new experience for me,” Pickens stated in a 1989 interview. “We’re very hopeful we’re going to learn how all this operates.”