Ex-Everest Hedge Fund Managers Turn Activists on Japan Stock

(Bloomberg) -- Volta Global, the family office run by former managers of hedge fund firm Everest Capital, has turned to activism in Japan.

Miami-based Volta’s first target is a small construction company: it’s asking Asanuma Corp. to spend 10 billion yen ($92 million) on a special dividend or share buyback, and to hand over all its profit for the current financial year to shareholders, according to a March 19 letter to the Japanese company that Volta provided to Bloomberg. Volta also urged Osaka-based Asanuma to publish more information in English.

“We’re aware of the letter from Volta,” said Yoshimichi Yagi, investor relations manager at Asanuma. “We take the contents seriously, and will proceed in a positive manner to do what should be done. We have received various requests from other shareholders, and we are, of course, giving them proper consideration.”

Asanuma’s shares surged 16 percent on Monday in Tokyo, leading gains among construction stocks in the Topix index. The benchmark gauge added 0.1 percent.

Volta will consider moving to a proxy fight if Asanuma doesn’t respond sincerely to the requests, Jeffrey Evans, partner and managing director at the family office, said in a phone interview May 1 from Miami. Volta, which has owned Asanuma shares since January, tends to hold its public market investments for at least 18 months, he said.

Everest Capital

Evans and Volta’s chairman Marko Dimitrijevic previously worked at Everest Capital, which returned money to clients and closed funds in 2015 after a bet against the Swiss franc went dramatically wrong. Volta doesn’t oversee outside money, Evans said. He declined to say how much it managed, saying only that it is a “nine-figure number.”

Activist investing is increasing in Japan as Prime Minister Shinzo Abe’s government pushes firms to become more responsive to shareholders. Funds from Dalton Investments to RMB Capital Management have been seeking to unlock cash on company balance sheets by asking for bigger payouts and share buybacks, or encouraging executives to sell cross shareholdings.

Asanuma had 29 billion yen in cash and equivalents at the end of December, which is equivalent to more than 80 percent of the company’s market value.

“There are so many of these small and mid-cap stocks that have balance sheets that are all out of whack and don’t really seem to be embracing the governance reform principles,” Evans said.

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