You guys are big investors in Japan and The sort of activists and generally Shaking stuff up space over there talk To me about why now because I remember a Period a few years ago you know when AB Anomic was the hot thing and everyone Wanted to go to Japan to invest it was Going to open up more like America Didn't happen a lot of people came back You're still there why sure I think Largely because of a cabin omix there Was a lot of excitement a lot of foreign Investors rushed in but they expected Changes to happen very quickly like us And to some degree European companies Which clearly didn't happen and then When that didn't happen fast enough they Got out and now what we're seeing is Actually valuations are way more Compelling than they were a few years Ago Japanese market trades at seven Times Eva da and the US is almost at 13 Times the dividend yields even higher in The Nikkei than it is in the SP so Valuations are actually very attractive And also you're finally starting to see A lot of those changes that many people Were expecting a few years ago and Didn't see but one of the things that's Driven u.s. valuations is activism and The fact that it's sort of led to a lot Of clarification of companies it's Tidied up disparate businesses you need Receptivity for that is it there and
Sure I think it is when you look at the Market it really has gone nowhere for 20 Years the valuations now or as low as They were in the mid-80s and finally you Have companies that truly were very Complicated that are starting to Simplify which i think is a very Attractive market for us and is a very Attractive market for a lot of other Activists and engagement investors talk To me about what a fight looks like in Japan we have a pretty good idea of how It looks here it can get quite rough Quite quickly in Japan I imagine it's Slightly harder to just come out all Guns blazing against a company sure I Think it's very important to tailor your Approach for the domestic market right So when you look at valuations being Very compelling today and with companies Having a lot of disparate assets that Don't generate productive returns or That have the wrong governance or Disclosure there really are a lot of Things that companies can do beyond any Big changes to their operations so for Us and for a lot of other activist Investors we like to look at company is That a really well run that have a great Management team That have a good operating platform but Really have some issues around Governance the capital structure or Disclosure that investors can help
Engage with the company and help fix you Starting to see the emergence of Homegrown activists in in Japan because Obviously that would be a significant Battle just in as much as it would tell Us a lot about the receptivity of Companies there yeah sure there are a Number of activists investors in Japan That have been there for a number of Years I think really investors approach Both domestic and foreign seems to be Changing a lot in Japan so where as Companies in the past were not very Receptive at all to activist investors And as a result of the corporate Governance push and changes and Governance reform they've become more Receptive to investors and then also Investors have changed their approach And have gone to companies that maybe Don't need to make as drastic changes And also their approach is more in Engaging with companies rather than hard Activism I would say now you guys Already had some success in jr kyushu And one of the very few activist fights In all campaigns maybe I should say in Japan to go all the way through to a Proxy fight what else you looking at Were you seeing interest yeah I just Want to touch on jr kyushu first cuz i Think it's very important this to us was Really obviously had significance to us But i think has a lot of significance of
The broader market in that jr kyushu Was a former government-owned rail Company it just privatized a few years Ago it was really viewed as a business And a management team that maybe wasn't Very receptive to change and to changing Governance and many market experts kind Of didn't really want to touch it there Was a company where we engage with them We ended up highlighting what a lot of Other investors wanted through a proxy We got a very high turnout for a lot of Our proposals and the company actually Turned around brought in new independent Board members a stock comp plan they Started buying back their own stock and Making a lot of changes I think it's Important because if a company like that Can start to make the changes I think It's a sign that many of Companies in Japan are should do it just Quickly before I let you go are we gonna See fir tree sharp and any other Japanese stocks in the near term hmm no Comment on any new prospects I have Talked about Toshiba in the past which Is another name we continue to be Involved in another great example of a Company that really did use the Opportunity to do a lot of good and Change the governance buy back stock Announced a more comprehensive Restructuring and slimming down to their Corporate structure so
