The Japanese stock market is in a situation where structural changes are creating new investment opportunities. In this context, Cadira Capital Management focuses on investing in companies that are on their way to becoming sustainable companies.
We define a "sustainable company" as one that creates both economic and stakeholder value. The companies in the upper right-hand corner of the chart below are ideal investment candidates for us.
However, sustainable companies are often ideal investments for other investors and, as a result, their share prices tend to be high. While it is natural for superior companies to be highly valued, investing in a company with an excessively high share price can negatively impact returns. Therefore, we use logical and advanced methods to calmly evaluate stock prices.
On the other hand, as shown by the two arrows above, we take a forward-looking and inclusive approach, including but not excluding companies that are not currently considered sustainable but are on a path to improvement. The dark blue arrows indicate companies that have made progress on sustainability but have not been able to translate that progress into economic value, while the light blue arrows indicate companies that are highly profitable but still need to make significant improvements in sustainability.
To determine whether a company is on the path to becoming a sustainable company, it is important to evaluate its governance structure (see figure below). In particular, corporate governance affects both business and sustainability and should be examined as a factor that drives economic value and stakeholder value. At Cadira Capital Management, we place the highest importance on the personal qualities of top management when evaluating corporate governance. We also look at whether the company has a management structure that allows top management to fully demonstrate its capabilities.
When a company has a strong and balanced governance structure, it improves its financial risk-return characteristics and increases its net positive impact on the environment and society.
We are not just watching from the sidelines to see if our portfolio companies are on their to becoming sustainable companies, we are also providing lateral support through our engagement activities. Our contribution as an investor is to understand the activities of our portfolio companies and provide them with appropriate input to help them move forward.
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Impact Integrated Value (IIV)
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Positive Impact Assessment
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Our Investor Contribution
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Sustainable Companies
The Japanese stock market is in a situation where structural changes are creating new investment opp...
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Structural Investment Opportunity
At Cadira Capital Management, we believe that investor engagement will bring about a structural chan...
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Our Investment Philosophy
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Our Views on Geopolitical Risks
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Our Bottom-up Approach to Listed Equity Impact Investing
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The content of this website has been prepared by Cadira Capital Management Co., Ltd. (“CCM”) for informational purposes only to professional investors who are expected to make their own investment decisions without undue reliance on such content. The views and strategies described may not be suitable for all investors. Under no circumstances is it to be used or considered as legal or investment advice, a recommendation to buy, an offer to sell, or a solicitation of an offer to buy or sell securities and investors should be advised to consult their own stockbroker, accountant, solicitor, independent financial adviser, or other professional adviser for advice. We accept no liability whatsoever for any direct or consequential loss arising from any use of this content. The information is intended solely to report on investment strategies and opportunities identified by CCM. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. CCM and its affiliates do not warrant the accuracy or completeness of any of the information or data contained herein. References to specific securities and their issuers are for illustrative purpose only and are not intended to be, and should not be interpreted as investment advice or, a recommendation, offer or solicitation for the purpose or sale of any financial investment. This content does not constitute tax advice and as such investors should be advised to consult their own tax advisers regarding the tax consequences of their investment activities. Investment return and principal will fluctuate, so that a client's initial investment may increase or decrease. Investing in securities markets involve risks like those arising from stock and bond markets, currency exchanges rate and interest rate volatility. No part of this content may, without CCM prior written consent, be copied, reproduced, or published by any recipient for any purpose. Past performance is not indicative of future performance.
