Ground breaking research by Zuhair Khan at Jefferies indicates that a friendly engagement stance works better with small cap companies in Japan

We would like to draw our readers’ attention to the  ground breaking analysis on corporate activism in Japan carried out by Zuhair Khan at Jefferies.  Mr. Khan has written extensively on this topic and  the report below is an excellent  introduction to the  challenges and  opportunities in this space in Japan.  In subsequent  work  (Hard v Soft Activism – December 2018),  Mr. Khan’s research  indicates that, in general,  a friendly engagement stance rather than hard activism may work better with small cap companies.  This is precisely the type of engagement that we have been advocating and following since we set up the TMAM-GO Japan Engagement Fund in March 2012.

12 June 2018

Key Takeaway

We see a rapid rise in activism in Japan and believe that the current wave of activism is likely to be successful. However, there will be few easy victories due to the high level of allegiant shareholders. Our analysis shows that there are 4 types of companies based on their types of allegiant shareholders. This has implications for which companies activist investors should target and how.