If 2020 has taught us anything, it is that outlook statements can be so very wide of the mark. As we entered the year, many investors expected it to be an unforgettable one for Japan, with equities buoyed by the oncoming tidal wave of shareholder activism. As we are all aware, it was a slightly different set of events that led to the year being unforgettable for investors.

We feel, the opportunity set is vast, and shareholders are only just beginning to reap the rewards.

Despite the disruption posed by the economic lockdown, the anticipated return of shareholder activism remains very much alive. In the closing months of 2020, we saw the largest tender offer for a Japanese company in history and, separately, foreign private equity firms are again provoking bidding wars for underperforming companies. We feel, the opportunity set is vast, and shareholders are only just beginning to reap the rewards.

On a shorter-term perspective, it is our view that Japan is in a very favourable position relative to other geographical markets. It remains the quintessential cyclical value market which, after experiencing such strong headwinds throughout 2020, will likely be a massive beneficiary of the post-COVID-19 reopening of global trade. The vaccine provides light at the end of the tunnel and Japan is well positioned to exploit the opportunities presented by the normalisation of both the domestic and global economy.