Like Japan, Korean regulators have suggested they may publish a list of friendly and unfriendly companies, and non-compliance may ultimately risk de-listing – but time will tell how this policy unfolds, and how it will be enforced.
We must acknowledge there have been false starts around corporate governance reform before, and while it is dangerous to think this time is different the regulator appears to be acting more forcefully.
And maybe the performance of the Nikkei over the past 12 months is the kindling to start the fire.
At Antipodes we look for companies that are mispriced relative to their business resilience and their growth profile and we assess a company’s resilience based on 'multiple ways of winning' – the more ways we can win from owning an investment, in all likelihood, the better the quality of the business franchise.
Business resilience is a spectrum – some of our investments have more ways of winning than others – but we do have a minimum threshold. We will not buy stocks with binary outcomes because that risks capital destruction.
To be blunt, we are not putting all our eggs in the value up basket. Instead, we are focusing on companies with solid investment cases where value up represents another way we can win.
Alison Savas is the investment director of Antipodes Partner
