TOKYO (Reuters) - Activist investor Daniel Loeb, famously branded a carpet-bagger by actor George Clooney, has turned from bruiser to charmer in Japan, where he has added diversified retailer Seven & I Holdings to his portfolio.
Sources familiar with the situation say Loeb, 53, wants a management overhaul at Seven & I, which owns Sogo department stores and the 7-Eleven convenience chain, but in public the American has nothing but warm words for its 82-year-old Chief Executive Toshifumi Suzuki.
“Mr. Suzuki instills a culture of singular focus on the customer and urgency to continually improve the company’s best-in-class delivery systems and information technology,” Loeb’s Third Point hedge fund said last week in a newsletter announcing a new stake in the group.
In an interview with Reuters this week Loeb declined to take a swipe at managers, whom the sources say oppose his plan to spin off its underperforming supermarket unit.
That’s quite a break from Loeb’s past form, which a Vanity Fair profile two years ago characterized as “nasty, personal attacks” on CEOs and colleagues to get his way.
He branded a former Yahoo! executive as “a destroyer of value”, lambasted top managers at auction house Sotheby’s for extravagance and “a lack of leadership and strategic vision”, and blasted the bosses at Sony Pictures Entertainment for “blunders” and a “complete lack of accountability”. The latter drew the counterblast from Clooney for spreading a climate of fear in the movie studios.
But in Japan, where public diatribes are rare and executives are deeply suspicious of shareholders with agendas, Loeb, the former surfer who oversees Third Point’s $17.5 billion in assets, has been unfailingly courteous.
Though Prime Minister Shinzo Abe has been pushing companies to improve return on equity to attract more foreign capital, even homegrown activist investors there rarely succeed.
The country’s best known, Yoshiaki Murakami, who was convicted in 2007 for insider trading, resurfaced this year with an attempt to get himself and three associates on the board of Kuroda Electric Co to push an agenda of higher payouts and more M&A deals. Shareholders were having none of it.
Loeb’s star rose in Japan earlier this year when he persuaded robotics company Fanuc Corp to return more of its growing cash pile to shareholders. Though he criticized its “illogical capital structure”, he was full of praise for its “visionary founder” and technological superiority.
Recent investments in heavy machinery maker IHI Corp and Suzuki Motor Corp have been less successful, but Loeb said Japan was still an attractive market, with companies only starting to embrace better governance.
“I think the willingness of a number of corporations to cut costs and return capital, and improve and sharpen their strategy and focus on the things they are good at, create a very good backdrop for investors like us,” he told Reuters.
“Sometimes there are opportunities for us to help the process along a little bit, like we did with Sony and Fanuc.”
Reporting by Ritsuko Ando; Editing by Will Waterman