Monex establishes investment advisory firm Japan Catalyst
The new business will pursue investment returns through proposals to and engagement with listed Japanese companies.
Monex Group, Inc. (TYO:8698) today announces the establishment of investment advisory firm Japan Catalyst, Inc. (JCI). The new entity will pursue investment returns through proposals to and engagement with listed Japanese companies, its ultimate goal being to stimulate Japanese capital markets and to revitalize Japanese corporate sectors.
Regarding the rationale for the move, Monex explains that, in today’s environment of technological innovation and a rapidly changing competitive landscape, companies are realizing the increasing importance to adapt to and accommodate these changes. This requires incorporating an outside perspective, which is exactly what the Japanese government has been promoting since 2014 through its Corporate Governance initiatives. The most critical catalyst to enhance corporate governance is shareholder engagement with companies. In the face of some positive developments in Japanese corporate governance over the past several years, there is still room for improvement, for which engagement investment has its role.
Another factor highlighting the importance of engagement investment is AI, which is rapidly advancing. As AI has the ability to analyze at a similar level as humans but tens of thousands of times faster, it is difficult for investment companies to maintain their competitive advantage merely by quickly analyzing disclosed corporate information in the pursuit of investment returns. Therefore, engagement investment, which involves not only an investment in the company but also proposing strategies and changes, has increased in importance in this AI era.
Monex’s engagement investment advisory service is subject to regulatory registration as Investment Advisory and Agency Business in accordance with the Financial Instruments and Exchange Act.
JCI aims to be funded by Japanese individual investors. The advisory is conducted by professional investment managers based in Japan. They will meet directly with corporate management for active engagement.
JCI’s goal is to provide long-term investment returns for retail customers in Japan, thus it would not be involved in actions that would only improve short-term returns but could damage corporates’ long-term growth potential. We will advocate strategies and engage in a way that would benefit both investors and corporates continuously and over the long term with a perspective that would promote corporates’ long-term growth.
Oki Matsumoto, Monex CEO, is set to play a key role in JCI activities. Previous to Monex, Matsumoto was a general partner of Goldman Sachs where he was the head of trading and risk management in Japan. He also founded the Special Situation Group from scratch, which gained prominence for generating an outstanding profit among Goldman Sachs businesses worldwide. He also has 20 years of experience managing listed companies, as well as five years serving as an outside board member of the Tokyo Stock Exchange. He has participated in governmental councils where corporate governance was discussed, has been actively involved in various improvements and changes in Japanese capital markets, and has made many public statements continuously over the past 20 years.
The establishment of JCI and its activities form part of the core of Monex’s and Matsumoto’s mission.
