Little more than a year after losing its high-profile proxy battle with Japan’s largest electric utility, The Children’s Investment Fund Management is getting out of Asia entirely.
The Japanese government pulled out all the stops to keep the activist hedge fund from getting its hands on a bigger chunk of Electric Power Development Co., better known as J-Power. But it could hardly imagine that its stand against the “national security threat” presented by TCI would drive the hedge fund off the continent entirely.
Its Japanese defeat–which cost TCI $130 million–was followed earlier this year by the departure of John Ho, the hedge fund’s top executive in Asia and the pointman for its J-Power bid. Last month, TCI closed its Hong Kong office, and the London firm has sold off most of its investments in Asia and has approached other hedge funds in the region about buying what’s left of its portfolios there.
TCI’s certainly not the only activist hedge fund to find itself unwelcome in Japan, and it’s decision to quit Asia is the latest in a long string of western hedge fund firms retrenching in the region or eliminating their presence there entirely.
Emphasis on latest: With investors beginning to return to hedge funds this year, some in the industry are looking to pick up in Asia where the old guys left off. It’s been a rough year for TCI, which plummeted 40% last year and was down this year through August. The firm’s assets under management have fallen by half and it has lost three top executives, including all of its remaining founding partners save top man Chris Hohn.
You can’t help but suspect that this move has less to do with the Japanese and more to do with TCI.
Activist hedge fund TCI closes down in Asia [Reuters]
TCI’s Asia Chief Resigns; Third Major Departure This Year [FINalternatives]
TCI Sells J-Power Stake [FINalternatives]
TCI Lambastes Japanese Government Decision [FINalternatives]
TCI are a good lot.. they create value in shareholding they have .. I am impressed with what they can do by just owning less 5% of a company… brilliant organisation… I wish I could work for them someday ..
Billy Mays here to introduce my newest product, The SHAZANUS!
The Yakuza got him. The team needs to get into the self defense LA program for investment managers.
Program now open for doing business in Asia as well. lol.
OK Jon enough with the links to FinAlternatives. I want a link to the original news pup that printed the news you are writing about. Fin is just an aggregater right? And I want it in the text so I don’t have to read each of the links to understand where you are backing up that info.
If this gig is going to be about self promotion for FinAlternative please quit now.
Greg
I’m going to invite your friends over for a surprise party on your birthday and then invite you out for dinner at the Palm. While you enjoy your steak, they will grow annoyed, then anxious, and finally disappointed at your absence. You’ll have some explaining to do after that.
Not Jeff Macke but a fan of his work
WHERE IS GREG MICHAELS?
I used to go to university with one of their former Asia exec’s in Sydney, Australia (you should know which one by now).
The TCI guys came up some good ideas but the problem is that their ideas, tactics, and modus operandi would never work in Asia today. Going after a closely-held Hong Kong property company was a long shot (TCI ended up selling the stocks back to the controlling shareholder and only to see the controlling shareholder used the company’s cash to pay out a massive special dividend to himself TCI-style). What irony…………
Going after a newly privatised public housing property operator (The Link REIT) in Hong Kong made TCI public enemy No. 1. TCI some quick bucks but they held on for too long and lost money on their remaining stake).
Taking on the largest electricity supplier in Japan was always going to be a long shot.
The remaining portfolio is pretty crappy. The Prime Brokers had first dips on them anyway.
how about steel partners japan? are they killing it?
Do you think countries like G.Britain and U.S would allow Japanese firm to invest in either or both country’s electric utilities? I bet not because they would consider it as threat to national security.
Remember when Japan was awashed with cash, went on buying spree and some people here weren’t happy about it?
Fuck! The West thought them lessons even China is learning.