Yoshiaki Murakami

"My investment strategy is thorough value investing, focusing on companies whose market capitalization is lower compared to the assets they hold. Often, such companies might be experiencing management issues. When I try to address these problems from a shareholder's perspective, I'm criticized as a "vulture fund." This is quite regrettable, and I have spent years trying to gain understanding. However, being naturally impatient, when my points aren't understood or when I receive evasive answers to my questions, I have a tendency to speak only to the point or become harsh in tone. At the core, I just want to be understood, but due to my poor communication method, the public perception of me remains negative as I'm often told "it's not what you say, but how you say it.""

"While deviating slightly from the topic, when I go out to eat with my family, we often play a "meal cost guessing game". It's a very simple game where each participant has to guess the cost of the meal when visiting a restaurant. Each family member must declare their estimated value with at least a 500 yen difference from other participants, and ultimately, the participant whose estimate is closest to the actual amount wins a prize. When we play this game as a family, including me and the kids, we first look at the menu and try to remember the prices of not only what we order but as much as we can. Then, just before paying for the meal, we decide the order by playing rock-paper-scissors, and each of us declares our estimate of the total cost of the ordered meals. Here, there is a rule that the declared estimated amount must be at least five hundred yen different from the other participants. So, it's not just about declaring what you think the amount will be; you can also impose certain constraints on the estimated amounts of those who declare after you, based on the amount already declared by others and the amount you declare. Therefore, each participant considers how far to set their estimated amount from others to increase the chances that their estimate is closer to the actual amount. I believe it's a good opportunity to make children think about the balance between the cost of things and the quality of food and service, and considering how much I expect and how much others might expect helps lay the foundation for deriving more accurate expectations in the future."

"Today, I live in Singapore, a place deeply connected to my father. From the late seventies to the eighties, my father spent half of the year in Singapore. He became an external director of the second largest conglomerate in Singapore, the Hong Leong Group, and engaged in joint investments in Asia. Mr. Quek Hong Pung, the founder of the Hong Leong Group, was my father's best friend. Now I am close with his son, Mr. Quek Leng Beng, as families. When I was arrested in 2006, Japanese weekly magazines rushed to interview Leng Beng. He answered straightforwardly, "Our families have been close since our parents' generation." I was very pleased to hear that."

"I started investing in stocks myself when I was in the third grade of elementary school. One day, my father placed a stack of 1 million yen bound with a band and said, "Shosei, you always ask for allowance, but I can give you 1 million yen now. However, this will be your allowance until you graduate from university. What will you do?""

"In 1988, the management of RJR Nabisco announced the MBO, encouraged by an investment bank's proposal. It later came to light that there was a secret agreement with M&A advisors that about two billion dollars in rewards would be given to the seven managers (themselves) if the MBO succeeded, and external directors also expressed support for the MBO. However, because the purchase price offered was too low, Mr. Kravis of KKR, a veteran LBO fund, angrily declared, "He intends to snatch RJR Nabisco at a cheap price!" and immediately announced a competitive TOB. Naturally, this TOB was hostile, but since it was offering a higher price than the MBO proposal, external directors had no choice but to approve it. As a result, KKR acquired RJR Nabisco for about twenty-five billion dollars in an LBO. This incident demonstrated that once a company is put up for sale, potential buyers come forward, and it gets sold to the highest bidder. In other words, the mission of a company is to maximize shareholder value. This acquisition amount was the highest in history at the time and was titled "BARBARIANS AT THE GATE" in books and movies. Mr. Kravis of KKR, a pioneer of hostile takeovers, became my role model."

"After I started investing and became a major shareholder, I met with the president of Tokyu Hotels and had several meetings at the Akasaka Tokyu Hotel. I was seriously considering acquiring all the shares of Tokyu Hotels both through additional fundraising with the fund and personal borrowing, aiming to delist it and make it a private company of the fund, and so I proposed this. When the fund’s shareholding approached the ownership percentage of Tokyu Railways, the president of Tokyu Railways then requested to "have a talk." It seemed that the president of Tokyu Hotels was a senior executive from Tokyu Railways, and was unable to make major management decisions."

"When the fund started, my consulting work for the Tokyu Group had ended. This time, upon reviewing the Tokyu Group as an investment case, Tokyu Hotels, a subsidiary of the group, turned out to be very appealing to the fund. Therefore, after making a formal proposal to Tokyu Railways, I began buying shares of Tokyu Hotels. At that time, Tokyu Hotels had a market capitalization of about ten billion yen, but the real estate it owned in Akasaka alone was worth about five hundred billion yen in market value terms. Because of the presence of a major shareholder, Tokyu Railways, which owned 20% of the shares, the liquidity of the shares was low and the stock price was left undervalued."

"At its core, investment is, "putting resources, not limited to capital but possibly also human resources, into something based on the expectation that it will yield returns in the future," and investment always involves risks. However, there are investment opportunities where the relationship between risk and return is not balanced. Identifying these and investing where the return is greater than the risk is what investors do. I refer to this relationship between risk and return as "expected value." If the expected value is not high, there is no financial sense in investing. Being able to accurately assess this is a condition of a good investor."

"What we are doing in the fund is investing, but it was necessary to fully commit to being a manager of a company that manages other people's money. The original goal of pursuing the ideal state of the capital market and the requirement from investors for the maximum return sometimes conflicted, creating a significant dilemma. As a manager of the fund, I could not ignore returns just because I wanted to stick to my beliefs. I suffered greatly from my personality, which does not want to compromise on my beliefs, and from being in the position of being the manager of this fund. Now I am investing using only my own assets, not managing other people's assets, in order to be able to follow my beliefs to the fullest."