Nippon Active Value Share Discussion Threads

[spangle93] 12/8/2024 08:00

Anyone bold enough to secure some bargains last week?

SP is staying stubbornly below the peaks around Easter, but has shown resilience after the Japan sell off

[melloteam] 13/6/2024 11:43

*FREE EVENT* Nippon Active Value Fund will be presenting on the Mello Investment Trusts and Funds webinar on Tuesday 18th June, starting at 1pm.


Register here:

[spangle93] 03/4/2024 10:14

NAV per share up 23% in 2023, but share price total return up 41%, closing the discount from -16 to -4%

Let's hope for more in 24. The investment manager certainly does

[deadly] 18/12/2023 13:57

It's done very well this year.

[1watty] 18/2/2023 22:47

Tipped by Midas in Mail on Sunday this weekend

[rambutan2] 28/10/2022 21:11

Just watched an interview with the AJOT manager, and prompted me to see where the land lies here. Especially interested as the Yen has been so weak - even against the mighty Sterling!:

Latest factsheet:


Agm (June) update:


And here is the said AJOT chat:

[rjmahan] 03/5/2021 19:30

Thanks for the updates Rambutan - any views on this vs AJOT ?

[rambutan2] 20/9/2020 19:35

Recently released interims, and a few snippets:

...As we indicated in the prospectus, we anticipated that the Company would be fully invested after approximately six months. We are broadly on track, although during June our rate of purchases had slowed, partly because of lower than average trading volumes, particularly in the small and mid-cap stocks that are our targets, and also because of recent price movements which we believe are unsustainable. Softer markets and some pricing revisions have helped partially alleviate this in July.

While we are continuing to build positions, we do not feel able to give concrete examples of our investment targets or Rising Sun Management’s discussions with them. It is our intention to give more information through our monthly factsheets as well as future interim and annual reports once the full holdings have been purchased and engagement has progressed beyond the present introductory phase.

...By 14 August just over 75% of NAVF’s IPO funds have been invested in the initial target portfolio of twenty smaller Japanese stocks. Eleven positions have been built in full, with another five close to completion. Only three positions are proving difficult to accumulate in the desired quantities. One position is so illiquid, that its continued inclusion in the target portfolio is unlikely – the key question being whether to abandon it altogether and switch earmarked funds into bolstering the remaining positions or to substitute it with a fresh target. With only a week to go until the initial six months trading is completed, we will not reach our target of being fully invested in that time; but, progress, though sometimes s low, is steady.

Outlook
In the last quarterly commentary, published at the end of July and available on the Company’s website, I described the proposed forthcoming SPV strategy. I can now add that the first SPV, Earle 1927, has now been incorporated and Rising Sun’s status as purely an adviser to the SPVs, by virtue of being a subsidiary of Rosenwald Capital Management, is being confirmed with the Cayman Islands Monetary Authority. Fundraising for Earle 1927 is also underway with a number of commitments received and more expected. The strategy of acting as a concert party will shortly be in place.

In addition, constructive discussions have already begun with several Private Equity management firms based both in Japan and the US, as well as one in Singapore. It is hoped that co-operation with one or more of these groups will add greatly to the dynamic of our approaching interventions. While it would be naïve to expect our initial contacts with portfolio company representatives to be likely to induce a change in corporate direction (and they have not), it appears as if the main event is about to start.
Rising Sun Management Limited 1 September 2020



And latest fact sheet:

[rambutan2] 01/7/2020 03:28

...When stock markets plunged in March, Dalton Investments wrote to more than 30 Japanese companies asking them to buy back shares, according to co-founder Jamie Rosenwald. A buyback would indicate confidence in the future and take advantage of the cheap levels caused by “panic selling,” the $3.2 billion U.S. money manager said. More than a third of the firms responded by doing repurchases, according to Rosenwald.

“Dalton has not slowed down its corporate engagement activities since the outbreak of Covid-19,” Rosenwald said. “Dalton has quietly engaged managements to slowly increase dividends and conduct share buybacks where we feel that they are appropriate.”

[rambutan2] 01/7/2020 03:03

The Company announces that as at the close of business
on 29 June 2020 its unaudited net asset value ("NAV")
per Ordinary share ("Share") was as follows:

NAV per Share (including current financial
year revenue items) 105.92p

NAV per Share (excluding current financial
year revenue items) 105.57p

Investments in the Company's portfolio have been valued
on a bid price basis.

[rambutan2] 01/7/2020 02:50

Update Letter from the Investment Adviser

05 May 2020

Things change. With the current enormity of dislocation in the international securities and resources markets, they must. Indeed, expectations already have and this has led inevitably to some questioning whether the accepted rationale for activist-led investing in Japan still obtains. In other words, do the principles guiding NAVF still make sense in a post Covid-19 world? For those who can't wait, the answer is 'yes', but, as they say, it's complicated.

I will have a go at explaining the answer above a little further on, only noting here that, although my crystal ball is now operating with diminished capacity, there are continuing overriding truths that should mean we will not need to rely on it for ultimate success. Firstly, let's examine the facts about how the first couple of months have gone. The news is all good!

The Fund raised £103 million and was admitted to the London Stock Exchange on 21st February. This turned out to be perfect timing. A month later and global paralysis would have prevented it happening at all. We have set about the task of putting the funds to work and today we are about 51% invested and the NAV per share is roughly 101, or slightly above par. I don't have any other collective investments that have actually gone up since the pandemic struck. I doubt many do.

Every new venture needs some luck, now we must make the most of it. We aimed to have the Fund fully invested inside six months and we are still on track to achieve this. By definition, our target list of around 20 smaller cap counters does not include the most liquid stocks. Some have been easier to accumulate than others and so we have made some slight adjustments to our limits both as to quantity and price while adding an additional name to the mix. The build-out period has also been useful for the testing and perfecting of our management and dealing systems and these are now mostly bedded-down satisfactorily.

So, now let me return to the Fund's raison d'être. Anjani Trivedi recently published a Bloomberg article entitled 'Hedge Funds Will Be Collateral Damage in Japan'. The crux of her argument is that in a new world where cash is king, Japan's asset-rich companies suddenly look prescient and well-managed. Resilience rather than efficiency will be the order of the day, with Western activists' obsession with squeezing dividends out of their prey looking more short sighted and irrelevant by the moment. As the first line of her article says: 'So long, activists. No one's giving you any cash back, at least not anytime soon.'

These points are well made. I accept the global pandemic has supplied some timely ammunition to defensive strategies seeking to justify large chunks of cash on company balance sheets. However, there is still a difference between comfortable operational buffers and holding vastly excess capital. NAVF's charter has never depended on smash and grab tactics, we are investors focused on the long-term and interested in growing value together with the managements of our portfolio companies. The intrinsic worth of our holdings may be protected by their asset backing (as has been shown since we launched) but it will be augmented by unlocking their untapped earning power or demonstrating the lack of it. This will be achieved over time by aligning managements' interests in what are, after all, exclusively 'salaryman' controlled entities with our own.

Our portfolio is diverse and offers a variety of levers to pull to reveal value. We have no initial need to be confrontational or to demand to be 'shown the money'. Our key strategy is premised on getting restricted stock into the hands of managers; in helping executives to think like us, rather than trying to repel us. This was always the plan and, in this respect, Covid-19 has actually changed nothing, except, perhaps, to provide us with a better platform from which to launch our campaign.

All in good time. Let's get the money invested first.

[rambutan2] 01/7/2020 02:45

NAVF aims to provide shareholders with attractive capital growth through its investment in a focused portfolio of quoted Japanese securities.

Rising Sun Management believes that corporate governance reforms have created the right circumstances and environment for activist investors to successfully engage with publicly traded companies in Japan to improve shareholder returns.

The company's activist strategies, include:

Communication and dialogue with management teams and boards (including management meetings and letters and presentations to the board);

Putting representatives of the company on the board of investee companies;

Making shareholder proposals. Shareholders who hold three per cent. or more of a company’s voting rights for at least six months can demand that directors call extraordinary general meetings regarding any matter that the shareholder calling the meeting is entitled to vote on under Japanese law;

Collective engagement with other shareholders;

Partnerships within the industry as well as turnaround specialists; and

Tender offer bids, typically as part of a consortium of other investors.

[rambutan2] 01/7/2020 02:42

The Company invests in a highly concentrated portfolio of shares issued by listed or traded companies which have the majority of their operations in, or revenue derived from, Japan and which the investment adviser deems attractive and undervalued and where (i) cash constitutes a significant proportion of the investee company’s market cap; and (ii) the relevant company has no controlling or majority shareholders.

Rising Sun Management (“Rising Sun”) will be the investment adviser to NAVF and will be led by James Rosenwald who has over 40 years’ experience investing in Asia and is co-founder and managing partner of which has a strong track record investing in Japanese equities.

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Similar ish remit at AJOT :