Portfolio Update

Update on portfolio holding

Nippon Active Value Fund urges Intage Holdings to undertake a management buyout

London / Tokyo, 27 January 2022: Rising Sun Management ("RSM"), the investment advisor to Nippon Active Value Fund ("NAVF"), an activist, Japan-focused Investment Trust, has sent a letter to the management of Intage Holdings (Bloomberg Ticker: "4326 JP Equity"), a Japanese marketing research firm, urging that it undertake a management buyout ("MBO") of the company.

The letter noted a filing on January 18, 2022 that showed NAVF in combination with Earl 1927 LLC and Michael 1925 LLC (the "Investor Group") now hold 4.1 million common shares in Intage, making the Investor Group the company's biggest shareholder with a 10.17% stake. RSM also represents the Earl and Michael LLC vehicles.

The letter (which can be seen at NAVF's website: www.nipponactivevaluefund.com) highlighted several areas of concern with how Intage is managed. They include:

·    Lack of widely held stock incentives for management and employees

·    An unsuitably expansionist acquisition policy lacking sufficient financial returns

·    Slow progress in digitising operations and low levels of automation in the business generally

"We urge Intage Holdings to undertake immediate preparations to organise a management buyout that will comply with the Japanese government's continued policy to align employee compensation with the economic interests of the company's owners," said Paul ffolkes Davis, Chairman of RSM, the investment advisor to NAVF.

NAVF is an activist investor which draws on the RSM team's significant Japanese market knowledge and their two decades of successful intervention to generate uncorrelated returns. Many Japanese companies are under-researched, show rising balance sheet cash reserves and have questionable capital allocation policies. NAVF seeks to engage with investee company management teams to promote value enhancing corporate reorganisation and capital allocation strategies that can result in significantly improved returns for stakeholders, including both employees and shareholders.

In 2021, NAVF having acquired a 6% stake in Sakai Ovex, then led a campaign to pressure the company's management to conduct an MBO, arguing that the firm was significantly undervalued by the market. NAVF first proposed an MBO at ¥2350, and after being joined by like-minded investors, this eventually rose to ¥3810. The successful MBO crystalised a more than 100% gain for the Fund's investment in Sakai Ovex.

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NOTES TO EDITORS

About NAVF

Nippon Active Value Fund ("NAVF") is an Investment Trust listed on the Specialist Fund Segment of the London Stock Exchange. The investment advisor of the Fund is Rising Sun Management Limited ("RSM"). NAVF is targeting attractive levels of capital growth for shareholders from the active management of a focused portfolio of quoted small cap Japanese equity investments. RSM targets companies which it sees as attractive, undervalued and which have a substantial proportion of their market capitalisation held in cash and/or listed securities and/or realisable assets.

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