Funds get activist in Japan

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Funds get activist in Japan

Behind Japan’s headline economic restructuring, a gradual but fundamental shift in Japan’s corporate ownership is taking place. A growing band of fund managers is encouraging companies to change; in some cases forcing them to do so. In the process the managers are making a tidy sum. Chris Leahy reports.

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JAPAN IS NOTHING if not conformist. Centuries of tradition and strict social etiquette impose restraints on the individual for the benefit of society. An air of calm pervades the well-ordered streets of Tokyo where even policemen, parking attendants and security guards salute and bow smartly to passers-by. So when someone does something unusual in Japan, it usually gets noticed.

It is unlikely that few locals took much notice of Shuhei Abe when he founded Sparx Asset Management in 1989 as president and CEO. That cannot be said today: Sparx, which is listed on Japanese growth market Jasdaq, manages $14 billion of investments and boasts a market capitalization of some $3.5 billion. Abe identified early on of the inevitable changes faced by corporate Japan in the wake of its economic crisis and this accounts for his company’s spectacular growth.

“The Japanese economy was forced to change and the procedures used in the past to enhance productivity also had to be changed,” says Abe, who is the president and CEO of Sparx.

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