Reuters- The Children’s Investment Fund (TCI) is scouring Japan for more deals but sees its struggle to raise the dividend at Japanese electric power wholesaler J-Power as a test case for furtherinvestment, a TCI executive said on Monday.
TCI also said it is proposing that J-Power maintain a higher level of dividend payouts, not just a one-off hike, as a sign of sustained shareholder friendliness.
“We would like to invest more here,” said John Ho, TCI’s head of Asia-Pacific investments during an interview with Reuters. “The issue is whether that value is able to be unlocked, partly because of capital management issues.”
TCI, a hedge fund with headquarters in London, suggested in March that J-Power — Japan’s Electrical Power Development Co. — raise its relatively low full-year dividend to 130 yen.
J-Power retorted that the proposal from its largest shareholder would reduce resources earmarked for growth, drawing the battle lines for the company’s shareholder meeting on June 27, where 50 percent of the votes will decide the issue.
Investor activism is increasing in Japan, forcing a debate over the appropriate level of returns to shareholders. Tension between management and their more vocal investors is expected to climax at the flurry of annual general meetings slated for this month.
