Milwaukee City Wire

A Milwaukee-based “activist” hedge fund is facing headwinds in Japan, where local leaders are challenging the adage that a country’s largest companies exist solely to deliver “shareholder value.”

Artisan Partners has bought one percent of Tokyo-based Seven & I, Japan’s second-largest retailer and the owner of 7-11, and has been pressuring company leaders to restructure or sell, so it can cash in on its investment.

But Japanese political leaders say other interests of Japanese people should take precedence over foreign investor returns.

Japan’s “economic revitalization” minister Ryosei Akazawa said Seven & I is “core” to Japanese national security, because the company’s stores serve as “disaster support stations” for the public.

"Speaking about a potential acquisition of Seven & I, I think the matter is heavily related to (national) security," Akazawa told the Japan National Press Club. "If Seven & I's convenience store business is in foreign hands and run solely for profits, we'll have to think about ... whether we can get full support when our people affected by the disaster are suffering.”

Akazawa’s comments mirror those of President Donald Trump, whose “America First Investment Policy,” which states that foreign investment “at all costs is not always in the national interest.”

“The United States will continue to welcome and encourage passive investments from all foreign persons," reads Trump's "America First Investment Policy. "These include non-controlling stakes and shares with no voting, board, or other governance rights and that do not confer any managerial influence, substantive decision making, or non-public access to technologies or technical information, products, or services.  This will allow our cutting-edge businesses to continue to benefit from foreign investment capital, while ensuring protection of our national security."

In January, the Japanese government announced new rules for foreign investors in Japan-headquartered firms "deemed key to Japan's national security," including requiring that they cooperate with in intelligence gathering. 

The rules would apply to any company that owns one percent or more of a Japanese firm.

Such rules promise to cramp the style of activist investors like Artisan, which has been lobbying for management changes at Seven and I since 2019.

Artisan owns about one percent of the company, while Japanese investors are the company's largest shareholders, including The Master Trust Bank of Japan (16 percent), Ito-Kogyo Co. (eight percent), Custody Bank of Japan (five percent) and Nippon Life Insurance Company (two percent).

The Government of Norway owns 1.8 percent of Seven and I, which has a $40 billion market capitalization and ranks as the 28th-largest company in Japan.

"A tax haven for global corporations who don’t care about the Irish people, just the financial benefit"

Trump's stated policy and Japanese moves to modulate foreign investment in the nation's flagship companies have sparked a broader debate around foreign investors and their often outsized political influence.

In Korea, a recent survey found that 66 percent of Korea-based company executives were concerned that activist investors would disrupt their operations, forcing them to make short-term decisions to the detriment of long-term business viability.

In Chile, Chinese investors now control two-thirds of the country's energy sector, and a Chinese government-owned business recently bought the country's second-largest salmon farming business.

Artisan and other activist firms, as well as Goldman Sachs, successfully agitated for the 2021 break-up of Japanese giant Toshiba, prompting critics to blame Japanese political leaders for inviting them to do so.

"What did Japan get for its lenient open door policy? Goldman's investors supported a leveraged recapitalization of Toshiba from the get-go, immediately plowing most of the funds raised into buybacks and dividends to themselves," wrote Nashville-based investor Andrew McDermott. "New management avoided playing any part in the recapitalization of the (now extremely valuable) (Toshiba-owned) US nuclear assets (which Canadian financiers bought for pennies on the dollar)."

"Toshiba eventually vanished with a whimper into the arms of exactly the sort of consortium that rescued other Japanese industrial leaders, but seven years too late," he wrote.

One cautionary tale is that of Ireland, which has attracted the headquarters of large corporations like Microsoft, Facebook, Accenture and Apple due to its favorable tax rates.

Critics say the government is now serving those companies well, but not its people.

"You can explain Ireland basically destroying itself fairly simply. It became a tax haven for global corporations who don’t care about the Irish people, just the financial benefits. Those outfits then funded globalist and EU (European Union)-minded politicians - who proceeded to do the mass immigration thing that this class always promotes," wrote economics pundit FischerKing64 on X.com. "Ireland - like many places - is at the mercy of a class of people who benefitted by whoring the country out for a quick buck."

Ireland let 149,200 immigrants into its country last year, a 17-year high. At this pace, the country will minority Irish by the year 2070.

Founded in 1994 by Andy and Carlene Ziegler, Artisan Partners had $167.7 billion under management as of Feb. 28, 2025.