Investment Strategy

As an activist investor, NAVF targets capital growth from investing in undervalued small and midcap companies in Japan.

Many of these companies are under-researched, show rising balance sheet cash reserves and are undervalued compared to companies in the US, EU and elsewhere.

This gives NAVF the opportunity to pursue value enhancing corporate reorganisation strategies that can result in significant share price increases.

NAVF’s edge comes from:

  • Analysts on the ground give it a hands on presence and local market knowhow to actively take advantage of the changing corporate governance landscape
  • Tight focus on investing in high asset backed companies (showing poor capital allocation) with strong cash reserves that will support the intrinsic worth of NAVF’s plays plus provide high margins of safety
  • Using an activist approach offers a complete tool box to unlock and generate performance among Japanese corporates with salarymen managers and use engagement with them to better align shareholder and management interest

Using activist strategies helps to create shareholder value, boost company share prices and drive investor returns which are uncorrelated to broader equity market trends.

The local expertise and extensive knowledge that the team at RSM provides enables NAVF to navigate the evolving Japanese corporate landscape with a combination of sensitivity and action-invoking firmness.

The company’s activist strategies, include:

  • Communication, dialogue and negotiation through meetings, letters and presentations to management teams and company boards.
  • Securing NAVF board representation with investee companies.
  • Collective engagement with other shareholders, industry players and turnaround specialists.
  • Tender offer bids, typically as part of an investor consortium.
  • Making shareholder proposals.
  • A shareholder who owns 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.