US hedge fund Elliott Management plans to shut its office in Tokyo, its last remaining outpost in Asia, as it continues to shift responsibility for investments in the region to London.
The Florida-based activist group, which was founded by billionaire Paul Singer and manages about $52bn in assets, has decided to close the Tokyo office despite being an active investor in Japan, where it has in recent years built stakes in prominent targets such as technology giant SoftBank and conglomerate Toshiba.
Its large activist campaigns in Asia have already been led out of London for some time. The move to shut the office would complete the shift in responsibility for new and existing Asian investments to the UK, the group said in documents seen by the Financial Times.
Elliott declined to comment.
The move is not expected to slow Elliott’s investments in Japan, where it has been deploying a growing amount of capital, according to a person familiar with its investments. Japan has in recent years become a hot target for global activist funds on the back of state-backed governance reform, record years of share buybacks and the sale of non-core assets by conglomerates.
While San Francisco-based rival Farallon Capital has an office in Tokyo, several other funds are active in Japanese investments without having a presence on the ground.
Elliott decided to shut its office following the retirement of Hirofumi Nakato, a senior figure who had been at the business for 15 years, including a decade as head of the Tokyo office, according to the documents. Nakato will stay on as a consultant until the end of the year.
The move comes after Elliott last year shut its Hong Kong office and moved staff to London and Tokyo.
The hedge fund, which employs close to 500 staff, has in recent years opened offices in Florida, now its headquarters, and Connecticut.
With Nakato’s departure, Elliott decided to shut the office and “to complete the ongoing transfer of principal responsibility for existing Asian investment positions, and for new situational trading and investments in Asia, to the London office”, it said in the documents.
Compared with its sometimes provocative moves elsewhere in the world, Elliott’s campaigns in Asia’s largest advanced economy have been relatively low-key but have involved prominent targets.
It revealed last year that it had built a large stake in Toshiba as the conglomerate clashed with activist shareholders seeking a private equity deal to take the company private. In early 2020, the fund also took a $2.5bn bet on SoftBank, using it to pressure the technology giant to carry out share buybacks and improve its governance structure.
Elliott’s activist investment campaigns in Japan have been led out of London while its local team in Tokyo has traditionally focused on real estate investments. According to people with knowledge of the discussions, Elliott held job interviews last year in a search for seasoned fund managers of Japanese equity.
Elliott, which has suffered only two negative years of performance since it launched in 1977, gained roughly 5.4 per cent in the first quarter, according to the documents seen by the FT, even as the S&P 500 index fell almost 5 per cent.