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Business Wire
3 days ago
- Business
- Business Wire
3D Investment Partners Sends Open Letter to the Board of NS Solutions
TOKYO--(BUSINESS WIRE)--3D Investment Partners Pte. Ltd. ('3D' or 'we'), an independent investment management firm providing discretionary investment services to a fund that is the largest minority shareholder of NS Solutions Corporation ('NSSOL' or the 'Company,' TSE Code: 2327.T), is committed to Japan-focused value investing with an investment philosophy centered on mid- to long-term value creation through compound capital growth. Today, we have sent an open letter to NSSOL, and we would like to share an overview of its contents. In the open letter, we disclosed the results of a survey of market participants (the 'Survey') conducted by an independent third-party research firm. The Survey revealed that a significant number of respondents share the following views: 1 64% of respondents answered 'Yes' to the question: 'Do you believe that NSSOL's corporate value and the interests of minority shareholders are being impaired by its parent company, Nippon Steel?' 100% of respondents answered 'No' to the question: 'Do you believe that NSSOL's outside directors are adequately fulfilling their role as representatives and advocates of shareholders?' 90% of respondents answered 'No' to the question: 'Do you believe that NSSOL's current Board of Directors maintains sufficient independence from Nippon Steel?' 72% of respondents answered 'No' to the question: 'Do you believe that NSSOL's new medium-term management plan sufficiently addresses the issue of value erosion caused by Nippon Steel?' These results suggest that many market participants share the same concerns that we have long held with respect to NSSOL. We have consistently pointed out that NSSOL's corporate value is being impaired due to its lack of full independence from its parent company, Nippon Steel. This includes various concerns identified in the Survey, such as economically irrational value erosion from transactions with Nippon Steel—such as low-interest deposits—as well as fundamental issues with the current Board of Directors and the inadequacies of the new medium-term plan. Based on the results of the Survey, we have reiterated our request that NSSOL's Board of Directors establish a special committee composed solely of independent outside directors to conduct a comprehensive and fundamental review, including a reassessment of NSSOL's relationship with Nippon Steel, with the aim of maximizing corporate value. In the open letter, we also presented more concrete proposals directed at NSSOL. We encourage all shareholders to share with us any views or feedback they may have. We would also be grateful if shareholders would refer to the materials provided as they consider how to exercise their voting rights at the upcoming Annual General Meeting, and as they engage in future dialogue with NSSOL. We remain firmly committed to pursuing constructive engagement with NSSOL to enhance corporate value—grounded in the candid perspectives of shareholders. 【Letter to the Board of Directors】 June 2, 2025 〒105-6417 Toranomon Hills Business Tower 1-17-1 Toranomon, Minato-ku, Tokyo 105-6417, Japan NS Solutions Corporation To: Representative Director Kazuhiko Tamaoki Board of Directors 1 Temasek Avenue #20-02A, Millenia Tower, Singapore 3D Investment Partners Pte. Ltd. Dear Members of the Board, We commissioned an independent third-party research firm to conduct a perception survey (the 'Survey') of market participants regarding NS Solutions Corporation ('NSSOL' or the 'Company') between April and May 2025. We were not involved in the interviews, feedback analysis, report preparation or summarization of key findings, all of which were conducted exclusively by the independent research firm. Accordingly, we had no influence on the Survey results. The Survey targeted a broad range of buy-side and sell-side analysts, both domestic and international, and we are highly confident in the objectivity of its findings. The results of the Survey are summarized in Appendix 1. The findings indicate that many market participants share the following views regarding NSSOL: The corporate value of NSSOL and the interests of its minority shareholders are being impaired by its parent company, Nippon Steel. NSSOL's outside directors are not fulfilling their role of representing and advocating for minority shareholders. The current Board of Directors of NSSOL lacks sufficient independence from NSSOL's parent company. NSSOL's new medium-term management plan does not adequately address the issue of exploitation by the parent company. These results demonstrate that many market participants share our concerns regarding NSSOL. We have long pointed out that NSSOL's corporate value is being impaired due to the lack of full independence from its parent company, Nippon Steel. The issues we have identified include economically irrational value erosion from transactions with Nippon Steel—such as low-interest deposits—as well as the lack of independence of the current Board of Directors (the 'Board') and the insufficiency of the new medium-term plan, all of which are reflected in the Survey findings. In its new medium-term management plan, NSSOL has announced that outside directors will comprise a majority of the Board following the June 2025 Annual General Meeting. However, the results of the Survey indicate that a significant majority of market participants believe that the outside directors are not fulfilling their role of representing and advocating for minority shareholders. This clearly demonstrates that simply establishing a formal majority of outside directors is insufficient to assure market participants that the Board has developed a robust supervisory function over management. In light of the concerns identified through the Survey, we hereby reiterate our request that NSSOL establish a special committee composed solely of independent outside directors to conduct a comprehensive review aimed at maximizing corporate value, including a reassessment of the Company's relationship with Nippon Steel. If this review is led by independent outside directors, it would ensure independence from the Nippon Steel and enable a fundamental review of the relationship with the parent company. This, in turn, would allow for a resolution of the current situation in which NSSOL's value is being impaired and the interests of minority shareholders undermined. In addition, conducting the review with objectivity and transparency, under the oversight of independent outside directors, would allow NSSOL to restore confidence in market participants of the Board's independence. To achieve the intended outcomes, the special committee must meet the following criteria: It must be a committee under the direct authority of the Board, composed exclusively of independent outside directors, to ensure independence from Nippon Steel. The scope of the review must include at minimum: (i) Quantitative assessment of the value erosion resulting from the current relationship with Nippon Steel and consideration of concrete remedies. (ii) Quantitative assessment of the growth potential currently constrained by the relationship with Nippon Steel and consideration of how to realize that potential. (iii) Quantitative assessment and consideration of other areas for value enhancement that remain unrealized due to the lack of independence from Nippon Steel and the absence of a KPI-driven management approach focused on maximizing corporate and shareholder value. To ensure the committee's effectiveness, a working group should be formed to support its operation, and a financial advisor with a proven track record in enhancing corporate value should be appointed. In line with discussions in the 'Study Group on Minority Shareholder Protection in Subsidiary Listings' and the Tokyo Stock Exchange's December 26, 2023 guidelines on 'Enhancing Disclosure on Minority Shareholder Protection and Group Governance,' the committee should produce results within a reasonable period and disclose both the review process and its findings with sufficient transparency. The above constitutes our current request to the Board. We respectfully ask that you inform us by June 30, 2025, whether you are willing to establish such a special committee. [Appendix 1] Survey Results 1. On the relationship with Nippon Steel 64% of respondents answered 'Yes' to the question: 'Do you believe that NSSOL's corporate value and the interests of its minority shareholders are being impaired by its parent company, Nippon Steel?' 62% of respondents answered 'Yes' to the question: 'Do you believe that Nippon Steel's influence and control hinder NSSOL's management from maximizing corporate and shareholder value?' 100% of respondents answered 'No' to the question: 'Do you believe NSSOL provides adequate explanations to shareholders regarding transactions with Nippon Steel that may impair corporate value or minority shareholder interests?' 2. On Outside Directors 84% of respondents answered 'No' to the question: 'Do you believe NSSOL's outside directors engage in sufficient dialogue and interaction with shareholders?' 67% of respondents answered 'No' to the question: 'Do you believe NSSOL's outside directors appropriately supervise conflicts of interest between Nippon Steel and minority shareholders?' 100% of respondents answered 'No' to the question: 'Do you believe NSSOL's outside directors adequately fulfill their role in representing and advocating for shareholders?' 3. On the Board of Directors 90% of respondents answered 'No' to the question: 'Do you believe that NSSOL's current Board of Directors maintains sufficient independence from Nippon Steel?' 4. On the New Medium-Term Management Plan 72% of respondents answered 'No' to the question: 'Do you believe that NSSOL's new medium-term management plan sufficiently addresses exploitation by the parent company, Nippon Steel?' Note: The above percentages have been calculated by excluding responses marked 'No opinion' and rounding to the nearest whole number. About 3D Investment Partners Pte. Ltd. 3D Investment Partners Pte. Ltd. is an independent Singapore-based Japan focused value investing fund manager founded in 2015. 3D Investment Partners Pte. Ltd. focuses on partnering with managements who share its investment philosophy of medium- to long-term value creation through compound capital growth and a common objective of achieving long-term returns. Disclaimer This press release is provided for informational purposes only and does not constitute an offer to purchase or sell any security or investment product, nor does it constitute professional or investment advice. This press release should not be relied on by any person for any purpose and is not, and should not be construed as investment, financial, legal, tax or other advice. 3D Investment Partners Pte. Ltd. and its affiliates and their related persons ('3DIP') believe that current market price of NSSOL does not reflect its instinct value. 3DIP acquired beneficially and/or economic interest based on its own idea that NSSOL securities have been undervalued and provides attractive investment opportunity and may in the future beneficially own and/or have an economic interest in, NSSOL securities. 3DIP intends to review its investments in the NSSOL on a continuing basis and, depending upon various factors including, without limitation, the NSSOL's financial position and strategic direction, the outcome of any discussions with NSSOL, overall market conditions, other investment opportunities available to 3DIP, and the availability of NSSOL securities at prices that would make the purchase or sale of NSSOL securities desirable, 3DIP may, from time to time (in the open market or in private transactions), buy, sell, cover, hedge, or otherwise change the form or substance of any of its investments (including the investment in NSSOL securities) to any degree in any manner permitted by any applicable law, and expressly disclaims any obligation to notify others of any such changes. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness, or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets, or developments referred to herein. 3DIP expressly disclaims any responsibility or liability for any loss howsoever arising from any use of, or reliance on, this press release or its contents as a whole or in part by any person, or otherwise howsoever arising in connection with this press release. 3DIP hereby expressly disclaims any obligation to update or provide additional information regarding the contents of this press release or to correct any inaccuracies in the information contained in this press release. 3DIP disclaims any intention or agreement to be treated as a joint holder (kyodo hoyu sha) under the Financial Instruments and Exchange Act of Japan, a closely related party (missetsu kankei sha) under the Foreign Exchange and Foreign Trade Act with other shareholders, or receiving any power or permission to represent other shareholders in relation to the exercise of their voting rights, and has no intention to solicit, encourage, induce or require any person to represent such voting rights. 3DIP does not have the intention to make a proposal, directly or through other shareholders of NSSOL, to transfer or abolish the business or asset of NSSOL and/or NSSOL group companies at the general shareholders meeting of NSSOL. 3DIP does not have the intention and purpose to engage in any conduct which constricts the continuing and stable implementation of business of NSSOL and/or NSSOL group companies. This press release may include content or quotes from news coverage or other third party public sources ('Third Party Materials'). Permission to quote from Third Party Materials in this press release may neither have been sought nor obtained. The content of the Third Party Materials has not been independently verified by 3DIP and does not necessarily represent the views of 3DIP. The authors and/or publishers of the Third Party Materials are independent of, and may have different views to 3DIP. The quoting Third Party Materials on this press release does not imply that 3DIP endorses or concurs with any part of the content of the Third Party Materials or that any of the authors or publishers of the Third Party Materials endorses or concurs with any views which have been expressed by 3DIP on the relevant subject matter. The Third Party Materials may not be representative of all relevant news coverage or views expressed by other third parties on the stated issues. In respect of information that has been prepared by 3DIP (and not otherwise attributed to any other party) and which appear in the English language version of this press release, in the event of any inconsistency between the English language version and the Japanese language version of this press release, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated. Expand 1 Percentages have been calculated by excluding respondents who answered 'No opinion,' and have been rounded to the nearest whole number.
Business Wire
26-05-2025
- Business
- Business Wire
Shareholder Activism in Asia Reaches Record High, Driving Corporate Governance Reforms, According to Diligent
SINGAPORE--(BUSINESS WIRE)--Shareholder activism in Asia has reached a record high, with over 200 companies targeted in both 2023 and 2024, up from 134 in 2021, reflecting the growing importance of corporate governance and shareholder engagement across the Asia-Pacific region. The Diligent Market Intelligence: Shareholder Activism in Asia 2025 report from Diligent provides a comprehensive analysis of key activism trends across the region. According to the report, Japan has emerged as the most active force in the wider Asian market, with 108 campaigns advanced by activists in 2024, a 74% increase from 2018. Despite the market turbulence that abruptly changed the course of the season for many other global markets in the opening quarter of 2025, Japan has remained largely insulated from such upheaval with 19 new campaigns launched in the three-month period. South Korea has also been a busy market for activists, with 78 public campaigns in 2024, a year many considered to be a watershed moment. This represented a significant increase from 16 campaigns in 2018 and just eight in 2019, although a changing political landscape appears to have weighed on overall activity in Q1 2025. 'This increasing interest in the Asia market continues to be fueled by governments prioritizing corporate governance reform and activists bolstering their teams to capitalize on emerging opportunities,' said Josh Black, Editor-in-Chief at Diligent Market Intelligence. 'In Japan, the largely domestic focus has meant activism continues to thrive in spite of geo-political tensions and other headwinds.' The report also examines three other themes that both Asia-focused boards and investors should have on their radar: Governance Reforms: A Top Priority for Activists Elevating governance and related disclosures are priority focus areas for activists operating in Asia. In the first three months of 2025, 17 such demands were advanced at Japan-based companies, and 16 in South Korea. Key Players in the Activist Landscape Japan-focused Strategic Capital was ranked as the top activist player in the region on the Diligent Market Intelligence dedicated watchlist, followed by Align Partners Capital Management, operating in South Korea. In joint-third place are Hong-Kong based Oasis Management Company and Dalton Investments, both with a focus on Japan. Rising Activism in Emerging Markets As Asia continues to attract the attention of foreign investors, Hong Kong has emerged as the third-most active market in the region, with the volume of public campaigns peaking in 2024. Singapore also saw a peak in activity last year. Demands to appoint or remove personnel were most common in both countries during this period. To download the full Diligent Market Intelligence report, which also features data sets examining activism trends in China, Malaysia and Taiwan, click here. About the Report The report contains full year data range from 2018 to 2024, as well as 2025 Q1 trends from Diligent Market Intelligence's Activism, Voting, Governance and Shorts module. Further data with bespoke analysis is available on request. For more information, email About Diligent Market Intelligence Diligent Market Intelligence (DMI) is a market-leading provider of shareholder activism, investor voting, and corporate governance data. Through its web application and data feeds, clients can access the most complete solution for listed company intelligence on the market, with broader and deeper insights than ever before. About Diligent Diligent is the AI leader in governance, risk and compliance (GRC) SaaS solutions, helping more than 1 million users and 700,000 board members to clarify risk and elevate governance. The Diligent One Platform gives practitioners, the C-Suite and the board a consolidated view of their entire GRC practice so they can more effectively manage risk, build greater resilience and make better decisions, faster. Learn more at Follow Diligent on LinkedIn and Facebook.
The Star
26-05-2025
- Business
- The Star
Asian hedge funds regain lost ground in May, increasing leverage
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 8, 2025. REUTERS/Brendan McDermid/File Photo HONG KONG: Asian equity-focused hedge funds have risen in May, erasing April's tariff-driven losses and returning to year-to-date highs on the back of broad market gains. Asia-focused fundamental long-short hedge funds have posted a gain of 1.6% so far this month, bringing year-to-date performance back to the first-quarter high of 6.1%, according to a Goldman Sachs note citing data as of May 22. A strong stock market rebound, fueled by the U.S.-China agreement to temporarily slash tariffs, helped regional managers recover from early April losses, the bank said. By country, China-focused fundamental managers have returned 1.3% in May, while Japan-focused peers are up 0.8%, Goldman Sachs estimated. However, the gains lag major benchmarks, as many funds had aggressively cut positions amid extreme volatility in early April. The MSCI Asia-Pacific Index has advanced more than 4% this month. "The V-shaped recovery was hard to trade for some," said Patrick Ghali, managing partner of hedge fund advisory firm Sussex Partners. Depending on positioning, Asian hedge funds' performance has diverged since April and "we will see a lot more dispersion of returns", he added. Goldman Sachs noted dispersion is particularly high in hedge funds trading Japanese shares. Despite ongoing tariff and geopolitical uncertainties, most hedge funds appear more willing to take on risk. Net exposure among Asian equity hedge funds jumped to 50.8% as of May 22, up from 46% at the end of April, Goldman Sachs says. - Reuters
The Star
20-05-2025
- Business
- The Star
Carlyle on Japan hiring spree for new US$3bil fund
TOKYO: Carlyle Group Inc has said it is on course to hire 10 investment professionals in Tokyo as it starts dealmaking for its latest 430 billion yuan (US$3bil) Japan buyout fund. The Washington-based private equity firm has already made four junior to mid-level hires this year, and aims to add six more by December, according to Carlyle Japan co-head Takaomi Tomioka. That will bring its total number of investment professionals in Japan to 35. Private equity has found a sweet spot in Japan in recent years, where borrowing costs remain low and companies from large corporations to smaller family-owned businesses have become receptive to selling off operations. Investors are also more keen to allocate money to Japan-focused funds. But the boom has also made recruitment increasingly competitive in the market, Tomioka said in an interview. 'Many new funds that have set up in Japan are frantically trying to hire,' he said. 'The competition is very intense.' Carlyle's Japan expansion comes as US President Donald Trump's tariff policies cloud the outlook for global businesses and investors. That has made evaluating new opportunities and exits via initial public offerings (IPOs) more complex, according to Tomioka. Most of Carlyle's Japan investments have been in medium-sized companies with a domestic focus, helping to shield it from some of the global trade turmoil. The firm, now in its 25th year of business in Japan, is still on track to invest its planned 100 billion yuan in the country for 2025, Tomioka said. Carlyle is seeking an IPO this year for portfolio company Orion Breweries Ltd, Tomioka said, pointing to the Okinawa-based beermaker's locally focused consumer business as less likely to be impacted by the trade ructions. Carlyle took Orion private in 2019 with the investment arm of Nomura Holdings Inc. Tariff policies have also had little influence on the factors driving dealmaking for private equity in Japan, according to Tomioka. Intensifying pressure to improve shareholder value is spurring local companies to go private or sell off non-core operations, and many smaller businesses face succession issues, he said. 'There is a significant deal flow,' he said. 'However, we need to be cautious about whether the companies we evaluate for investment can actually execute their business plans as planned within the current global economic environment. That assessment is crucial.' Most recently, Carlyle has acquired KFC Holdings Japan Ltd and is in the process of privatising software provider Kaonavi Inc. Carlyle's latest Japan buyout fund, its fifth, finished fundraising last year and is about 70% bigger than the previous one. Appetite was so strong that it sapped investor interest from a separate Carlyle pan-Asia buyout fund, Bloomberg reported last year. Japan-focused funds have drawn investment during a period of stagnant fundraising. The share of private equity capital raised focused on the country rose to 15% of the Asia-Pacific total last year from 7% in 2019, according to a report from Bain & Co. In the current global environment, Japanese companies that are focused on domestic businesses and not expanding globally are actually very appealing, Tomioka said. 'They are easier to invest in right now, and many are in our pipeline,' he said. — Bloomberg
Business Times
19-05-2025
- Business
- Business Times
Carlyle on Japan hiring spree after new US$3 billion buyout fund
[TOKYO] Carlyle Group said it is on course to hire 10 investment professionals in Tokyo as it starts dealmaking for its latest 430 billion yen (S$3.8 billion) Japan buyout fund. The Washington-based private equity firm has already made four junior to mid-level hires this year, and aims to add six more by December, according to Carlyle Japan co-head Takaomi Tomioka. That will bring its total number of investment professionals in Japan to 35. Private equity has found a sweet spot in Japan in recent years, where borrowing costs remain low and companies from large corporations to smaller family-owned businesses have become receptive to selling off operations. Investors are also more keen to allocate money to Japan-focused funds. But the boom has also made recruitment increasingly competitive in the market, Tomioka said. 'Many new funds that have set up in Japan are frantically trying to hire,' he said. 'The competition is very intense.' Carlyle's Japan expansion comes as US President Donald Trump's tariff policies cloud the outlook for global businesses and investors. That has made evaluating new opportunities and exits via initial public offerings (IPOs) more complex, according to Tomioka. Most of Carlyle's Japan investments have been in medium-sized companies with a domestic focus, helping to shield it from some of the global trade turmoil. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The firm, now in its 25th year of business in Japan, is still on track to invest its planned 100 billion yen in the country for 2025, Tomioka said. Carlyle is seeking an IPO this year for portfolio company Orion Breweries, Tomioka said, pointing to the Okinawa-based beermaker's locally focused consumer business as less likely to be impacted by the trade ructions. Carlyle took Orion private in 2019 with the investment arm of Nomura Holdings. Tariff policies have also had little influence on the factors driving dealmaking for private equity in Japan, according to Tomioka. Intensifying pressure to improve shareholder value is spurring local companies to go private or sell off non-core operations, and many smaller businesses face succession issues, he said. 'There is a significant deal flow,' he said. 'However, we need to be cautious about whether the companies we evaluate for investment can actually execute their business plans as planned within the current global economic environment. That assessment is crucial.' Most recently, Carlyle has acquired KFC Holdings Japan and is in the process of privatising software provider Kaonavi. Carlyle's latest Japan buyout fund, its fifth, finished fundraising last year and is about 70 per cent bigger than the previous one. Appetite was so strong that it sapped investor interest from a separate Carlyle pan-Asia buyout fund, Bloomberg reported last year. Japan-focused funds have drawn investment during a period of stagnant fundraising. The share of private equity capital raised focused on the country rose to 15 per cent of the Asia-Pacific total last year from 7 per cent in 2019, according to a report from Bain & Co. In the current global environment, Japanese companies that are focused on domestic businesses and not expanding globally are actually very appealing, Tomioka said. 'They are easier to invest in right now, and many are in our pipeline,' he said. BLOOMBERG
