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NAVF's Crusade for Corporate Reform in Japan Yields 7.6% NAV Growth

Strategic Insights

— 1 min read

Paul ffolkes Davis, manager of Nippon Active Value (NAVF), a £428m portfolio of Japanese smaller companies, believes that his fund's economic "crusade" to reform corporate Japan will be the real driver of returns. Despite global market uncertainty, NAVF's net asset value (NAV) increased by 7.6% and its share price by 8.5% over the six months to June 30, outpacing the 5% rise in the MSCI Japan Small Cap index.

Key Takeaways:

  • NAVF's portfolio of Japanese smaller companies delivered a net asset value (NAV) increase of 7.6% and a share price increase of 8.5% over the six months to June 30, outpacing the 5% rise in the MSCI Japan Small Cap index.
  • The fund's activism has contributed to a record number of "going-private transactions" totalling 32 in the first quarter, more than double the same period in 2024.
  • NAVF's campaigns have been instrumental in driving reforms, with several companies adopting new governance structures and management practices.
  • The fund submitted shareholder proposals at 12 annual general meetings in the first half of the year, with the most notable being at Fuji Media, where it called for the resignation of long-serving executive Hisashi Hieda.
  • The appointment of new directors at Fuji Media and other companies has led to significant reforms, including divestitures, investment plans, and changes in management.
  • NAVF's manager, Paul ffolkes Davis, believes that the fund's activism will continue to inspire further reforms, benefiting not only its own investors but also the broader ecosystem of Japanese equities.

Statistics:

  • 7.6% - NAVF's net asset value (NAV) increase over the six months to June 30.
  • 8.5% - NAVF's share price increase over the six months to June 30.
  • 5% - Rise in the MSCI Japan Small Cap index over the same period.
  • 12 - Number of annual general meetings where NAVF submitted shareholder proposals in the first half of the year.
  • 32 - Record number of "going-private transactions" in the first quarter, more than double the same period in 2024.

Sources:

  • Association of Investment Companies press release, date not specified.
  • Paul ffolkes Davis' statement, cited in the press release.
  • NAVF's performance data, cited in the press release.

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