FirstFT: Activist Elliott builds stake in Japanese conglomerate

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Good morning. The activist fund Elliott Management has become one of the largest shareholders of Dai Nippon Printing — a 146-year-old Japanese conglomerate with a huge but unheralded global share in components of electric vehicle batteries and smartphone screens.

The stakebuilding adds to only a handful of investments that Elliott has previously made in Japan — with Masayoshi Son’s SoftBank Group and Toshiba the most prominent. People close to the fund characterised it as an experiment in extracting trapped value that could pave the way for significantly more activity.

Elliott has quietly increased its investment in DNP over the past few months, according to people familiar with the situation, and now holds a stake of a little less than 5 per cent worth about $300mn, making it the third-largest external shareholder.

People close to DNP said Elliott’s initial engagement with the company, which has a market capitalisation of $6.3bn and currently trades where it did 20 years ago, has focused on a series of demands: a more aggressive share buyback scheme, the sale of its sprawling real estate holdings and an accelerated disposal of its extensive portfolio of shares in other Japanese companies.

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The day ahead

Inflation figures Inflation updates are due from the UK, Australia, Spain, Sweden and Singapore. Japan will also report its Consumer Price Index (CPI) cost of living measure. Use our global inflation tracker to see how your country compares on rising prices.

Tesla earnings It will be another week for Elon Musk watchers (just like every other week) with Tesla reporting fourth quarter figures. The company has been cutting prices of its electric vehicles to bolster demand in the US and Europe.

  • 🎧 Listen: In a recent episode of the Behind the Money podcast, the FT’s Richard Waters answers whether Tesla’s golden age of growth is over.

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Why passive investing makes less sense in the current environment Passive portfolio management is attractive in a world where investment outcomes are heavily influenced by a common global factor — as in the decade of artificially floored interest rates and massive central bank injections of liquidity. But in a world where the macro outlook is murky dynamic asset allocation trumps low fees, writes Mohamed El-Erian.

Take a break from the news

Japanese eyewear remains unmatched. It uses elements from the past, refashioned into something by modern means, designed for the future. We find out how the country’s glasses are made.

Dita Lxn-Evo DTS403-A-04 sunglasses, £845

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