Jamie Halse says the median small and mid-cap company in Japan — some 2,500 firms with market caps under ¥50 billion — trades at 0.9 times book value, and much of that book value is real estate still carried at prices set decades ago.
Japan's large caps have already re-rated on five years of governance reform, Halse says; the small and mid-cap market he specializes in is still in its opening innings.
"If your trading value is below one times price to book, that is the market saying that you're destroying economic value. If you're destroying economic value, you're destroying value for society. So you're actually doing harm to society."
Halse ran Platinum Asset Management's global and Japan equity funds for 13 years before giving up three-quarters of the assets he managed to launch Senjin Capital, an activist fund now involved in some of Japan's largest buyout fights.
I listened to the full interview so you can skip it. 29 minutes of audio, 12 minutes of reading.
Here are the 9 takeaways that matter.
👤 Guest: Jamie Halse, Chief Investment Officer of Senjin Capital, a Japan-focused activist fund manager based in Sydney
🎙️ Host: John Lee, who hosts Asia Centric for Bloomberg Intelligence from Hong Kong
📰 Published: 9 September 2026 on the Asia Centric podcast feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 29 min | ✅ Time saved: 17 min
Key Takeaways
Japan's small and mid-caps are still in the first or second innings of governance reform, even as large caps have already re-rated
Dividends and buybacks have doubled over the past four years, and cross-shareholding sales are spreading shareholder pressure to more of the market
Trading below book value now reads as active harm to society under the Tokyo Stock Exchange's campaign, not just as cheapness
The median price-to-book ratio across roughly 2,500 small companies under ¥50 billion market cap is 0.9 times
Activists have become kingmakers in Japan's buyout battles, pushing bidders and boards to pay up
Elliott Management pushed Toyota Industries' buyout price up by around 25% despite the founding Toyoda family's large stake
A Fujitech chairman was removed after Oasis uncovered he was using the company's parking garage to house a classic car collection
There are no CFOs in 90% of Japanese companies, and directors often don't grasp a basic concept like time value of money
Japan's corporate culture still treats the company as family, a mindset Halse compares to 1960s-70s America's "country club CEO" era
Two thirds of the small-cap companies Senjin approached agreed to take a call, and none have a dedicated investor relations team
Common Japanese phrases like "that will be difficult" are polite ways of saying no, Halse said
Halse gave up three-quarters of the assets he managed at Platinum to launch Senjin, and is now adding a more diversified fund
The new fund, with regular liquidity for investors, is set to launch in November
1. Still First Inning
Asked whether Japan's decade-old corporate governance reforms are for real, Halse said the doubts he used to field running Platinum's Japan funds in 2021-2022 have been settled.
"Now I can say we've been seeing the signs of it for more than half a decade." Dividends and buybacks have doubled over the past several years — "Dividends, buybacks have doubled over the past probably four years" — and companies are passing price increases on to customers because shareholders are pushing them to.
Pressure has spread beyond the direct targets of activist campaigns, Halse said, through the unwinding of cross-shareholdings. Banks and insurers including Nippon Steel, Sompo Insurance and MS&AD Insurance have been "under a lot of pressure to sell down" their cross-held stakes, which removes a layer of management-friendly votes and exposes more of the market to outside shareholders
Record numbers of companies are also going private, via management buyouts or private equity deals. "So investors are actually getting takeout premiums in the equity market that they never used to get in Japan at all"
On a baseball-innings scale, Halse puts large-cap Japan's valuation opportunity at the fifth or sixth inning relative to the US, and the underlying governance progress at only the fourth or fifth. Small and mid-caps are much earlier: "If you go to the small and mid caps, you're first or second innings easily." Payout ratios there have risen "from 15% to 20% to more like 30%"
2. Below Book Is Harm
Halse said Japan's push above one-times book value works because the Tokyo Stock Exchange's messaging is blunt rather than because companies are formally required to comply.
The Tokyo exchange doesn't name and shame non-compliant companies — it excludes them from a published list of "good companies" instead. "It's actually a don't name and shame. You're shamed by exclusion from the list of good companies, so-called good companies"
The moral framing is deliberate, Halse said: "If your trading value is below one times price to book, that is the market saying that you're destroying economic value. If you're destroying economic value, you're destroying value for society. So you're actually doing harm to society"
Lee cited his own research showing roughly 400 to 500 TOPIX-listed companies, about 20% to 25% of the index, still trade below book
Halse said the discount is far steeper in the small-cap segment he invests in. Among roughly 2,500 companies under ¥50 billion (about $300 million) in market cap, the median price-to-book ratio is 0.9 times, and those book values understate reality: "There's companies that have been around 100 years carrying real estate on the books at 100-year-ago prices"
3. Activists as Kingmakers
Asked about Japan's rising wave of takeover battles, Halse walked through several recent fights where activist shareholders determined the final price.
In the bidding war for Kakaku.com, owner of the restaurant review site Tabelog, EQT's agreed deal with shareholder Digital Garage was topped by a rival Bain offer backed by LY Corp, and the Hong Kong activist Oasis pushed the price higher from a 20% stake: "Oasis is obviously very motivated to get the best price. And that's turned out to be fantastic for minority shareholders"
Elliott Management forced Toyota Industries to raise what Halse called an "egregiously low price" bid, despite the founding Toyoda family's large shareholding through its holding company, Toyota Fudosan. Elliott pushed the price up "by around 25%." "The price should have been a lot higher than that still," Halse said
At Fujisoft, activists 3D Investment Partners and later Farallon Capital helped trigger a bidding war between Bain and KKR that "really drove a huge return for minority shareholders"
Pacific Industrial, Mandom and Soft99 saw similar activist-driven price increases, including Effissimo Capital outbidding management directly for Soft99
The pattern reflects a broader alignment between activists and private equity, Halse said: "So there's this real symbiosis as well between activists and private equity funds because management teams generally don't want to go private" but then find PE owners even less tolerant of underperformance than public shareholders
4. Quiet First, Loud Rarely
Most Senjin campaigns start as private, constructive engagement rather than public confrontation, Halse said — with one exception that turned openly adversarial.
Oasis removed the chairman of Fujitech and replaced the entire board after uncovering that he was misappropriating company property: "I had family members living in a house owned by the company that they then bought off the company for about half of what it was worth." Fujitech was later sold to EQT once Oasis-appointed independent directors controlled the board
Outside cases like that one, activists work behind the scenes for a year or longer before going public. At Fujisoft, 3D Investment Partners spent "more than a year" working quietly before its "first public campaign to appoint directors" to the board
A large share of Senjin's work is basic financial education, Halse said, because "there's no CFOs in 90% of Japanese companies." Board members often lack fundamentals: "It's quite common for directors on the board of even relatively large companies, let alone the small companies, to not understand a concept like time value of money"
Capital allocation is the easiest change to make, since it just requires a board decision on a buyback or dividend. Operational changes are harder: Halse gives the example of pressing a company on excess factory capacity — "You have eight factories. They're running at 30% utilization on a single shift five days a week. Do you really need eight factories, especially that one that's sitting on residential land in central Tokyo?" — and growth strategy usually means bolt-on M&A in industries that have rarely consolidated
The reluctance to consolidate traces to a different idea of success, Halse said. Unlike Western founders who often build toward an exit: "You want to IPO and become CEO of a public company, and then you want to stay CEO of a public company because that has a lot of prestige"
5. Why Japan's CEOs Don't Sell
Halse drew a direct parallel between Japan's corporate culture today and an earlier era of American business, when executive pay looked very different.
He compared Japan's boardrooms to 1960s-70s America, before stock-based compensation took hold. "It was more about the perks, your country club membership, the prestige of being the CEO of a public company," rather than the stock price — a culture the US only left behind with the 1980s rise of corporate raiders, junk-bond financing and the Revlon rule
"In Japan, the company is still very, very much seen as a family," Halse said, which makes a large pay package something a CEO worries will look greedy rather than something to chase
That is starting to shift as more companies go private, Halse said, recounting an anecdote from a Japanese investment banker who pitches these deals. "Mr. Watanabe's at the local golf club. And he sees Mr. Suzuki, who just sold his company to private equity, show up driving a new Mercedes. He thinks, oh, what's this private equity thing about when you sell your company to private equity? Well, it seems like it's not all downside"
As a result, Halse said, "So you're seeing larger portions of executive compensation become equity-based"
6. Two Thirds Take the Call
Asked about disclosure at the small end of the market, Halse said Senjin's own outreach shows most companies are willing to engage, even without formal investor relations infrastructure.
"About a third of them refused to take a call with us. Two thirds we were able to get in touch with, and they've all been quite receptive to doing meetings over time."
"These companies don't have investor relations teams, by the way," he said — at most a corporate-planning staffer or a director handling the role part-time. "Most of them have never released a strategic plan. It's just kind of business day to day"
Halse framed the underlying priority order plainly: "It's more customer first, employees second, general society probably third, and then shareholders are somewhere well down the list." He was careful to separate that from operational quality — the companies Senjin targets are often excellent by their customers' standards, just not run to maximize shareholder value
7. What 'Difficult' Means
Halse said language has not been a barrier for Senjin, since his co-founder, Tsubasa Umezaki, is a native Japanese speaker — but he described how much gets lost even with a skilled translator.
"My co-founder is native Japanese, so definitely not an issue for us." Before starting Senjin, running Platinum's Japan fund meant translated calls: "Even with translated calls, you need experience to make sure that you're getting the most out of them," since specialist topics get harder to follow once a non-specialist translator is added
He gave two examples of Japanese corporate euphemism that a literal translation misses entirely. "That will be difficult means there is absolutely no way in hell that's ever happening," and "We would like to think about doing that means we are not thinking about that nor do we have any plans to think about that and we are unlikely to ever think about doing that"
8. A Sydney Contrarian Bet
Asked what it's like running a Japan-focused fund out of Sydney rather than a regional hub like Singapore or Hong Kong, Halse said the time zone is no obstacle, but investor familiarity is thinner.
"There is less familiarity with investing in Japan than you'd see in Singapore or Hong Kong, or maybe even parts of the States and Europe, which is surprising given more than a million Australians visited Japan last year."
He offered his own explanation for the travel numbers: "Yeah, on a population of 25 million, to have more than a million people going to a country that's a nine and a half hour flight away is quite an achievement. Maybe says something about the poor quality of Australia's ski season"
Running an unusual strategy in a market with few Japan specialists has an upside, Halse said: "You get a lot of meetings. People want to hear from you. They want to listen to you"
9. Skeptic to Founder
Halse, a New Zealander, traced his path into Japanese equities back to a moment at Platinum Asset Management when the received wisdom about the market stopped making sense to him.
Joining Platinum's global equities team in 2011, he kept finding "So many cheap companies, even big companies with half their market cap in cash trading on 10 times earnings or five times when you back out the cash." He was told not to expect anything to change: "And the PMs always said, oh, don't worry about that. You're never going to see that cash. Management teams don't have to care about shareholders in Japan"
A handful of early activist headlines convinced him otherwise, and he pitched an activist Japan strategy internally in 2016 — a strategy he says Oasis has since proven out, compounding at close to 30% a year for a decade while its assets grew into the billions
He was given the Japan fund's mandate in 2021 with an activist tilt, but concluded Platinum wasn't structured to do it properly. "I believed in the opportunity so much that I was going to give up three quarters of the money that I was managing at the time, give up my global fund, half the Japan fund, and absolutely focus on doing this"
Platinum's turmoil forced him to withdraw an offer to the Japanese national he had recruited to join him there; he asked the same person to build the fund outside the firm instead: "I really want to do this. Would you like to do it with me outside Platinum?" Ten years after he first pitched the idea, Senjin Capital's initial fund is concentrated with a long lockup, and a second fund with "regular liquidity for investors" is set to launch in November, "by the looks of it," aimed at wealth advisors and smaller institutions
Bonus Insights
The TOPIX index is being narrowed but still holds "more than a thousand companies," Halse said, distinct from the much smaller Nikkei 225
Lee capped Halse's private-equity anecdote with a one-liner of his own: "Keeping up with Mr. and Mrs. Watanabe"
Halse's bottom line is that Japan's governance reforms have already re-rated the large caps everyone talks about, and the bigger opportunity now sits in thousands of small, cheap, under-researched companies where activist engagement is only just beginning.
Products, Companies & Tools Mentioned
Senjin Capital (Halse's own activist fund, launched with co-founder Tsubasa Umezaki to buy deeply discounted Japanese small caps and engage management on capital allocation)
Platinum Asset Management (Where Halse spent 13 years, eventually running the firm's Japan fund before leaving to start Senjin)
Toyota Industries and Elliott Management (Elliott pushed Toyota Industries' buyout price up around 25% despite the founding Toyoda family's large stake)
Kakaku.com and Tabelog (Subject of a bidding war between EQT and Bain, with Hong Kong activist Oasis Management pushing the price higher from a 20% stake)
Fujisoft (A KKR-Bain bidding war, driven in part by activists 3D Investment Partners and Farallon Capital, that delivered a large return to minority shareholders)
Fujitech (Oasis removed the chairman after uncovering he was misappropriating company property, including its parking garage, for personal use)
Tokyo Stock Exchange (Its campaign pushing listed companies above one-times price-to-book, enforced by exclusion from a "good companies" list rather than formal mandate)
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