Nippon Active Value eyes tweaks to investment policy following double merger
The trust intends to 'acquire meaningful minority stakes in each investee company', it said in the shareholder letter.
In a shareholder letter on 1 September, the trust set out the changes it intends to make to its investment policy, as NAVF is set to increase considerably in size following the rollover of the assets of the two other trusts.
If approved by shareholders at the general meeting on 20 September, the trust will not be «constrained» by any index benchmark in its asset allocation, it said, and it will not have any set limits on sector weightings or stock selection within its portfolio.
'Consolidator' Nippon Active Value posts 6.7% rise to NAV total return for first half of 2023
The trust will invest in a selective portfolio of shares issued by quoted companies that have the majority of their operations in, or revenue derived from Japan. It will also invest in companies with a majority of consolidated net assets held in Japan or those included in the Tokyo Stock Price Index (TOPIX).
Criteria for potential investee companies will include undervalued firms with a market capitalisation mostly comprised of cash, other liquid investments, real estate and/or tradeable securities; and if the companies have no controlling or majority shareholders.
This is because the trust intends to «acquire meaningful minority stakes in each investee company», it said in the letter, as long as the stake will not change its status as an investment trust.
NAVF will have no restrictions on investee companies' market capitalisation, but it expects the portfolio to be weighted towards small- and mid-cap companies with a market capitalisation of up to $3bn.
The portfolio is expected to have up to 35 holdings, although the trust said it
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