[Mitsubishi UFJ Trust and Banking] Joint Research Report on Actual Status and Trends of Dialogue between Companies and Institutional Investors

Mitsubishi UFJ Trust and Banking Corporation (President: Hiroshi Kubota) conducted empirical research on the impact of institutional investor trends in collaboration with Professor Miwa of Meiji University, Professor Asai of the same university, and Professor Yamada of Seijo University.

The study used response data provided by listed companies through the bank's 'Governance Research 2025' survey and publicly available information to statistically analyze actual engagement practices by institutional investors and activists, as well as approach tendencies and requested improvement themes by investor attribute.

[Summary]

1. Are there trends in target companies by investor type?
Both institutional investors and activists tend to target large companies with high foreign shareholding ratios.
Meanwhile, domestic and foreign institutional investors tend to target companies with high ROA, whereas activists tend to target undervalued companies with low PBR. This reflects differences in their respective approach methods.

2. Are there trends in themes of improvement requests by investor type?
Both domestic and foreign institutional investors tend to request improvement in business strategy, financial efficiency, and governance as a triad for companies with low PBR.
For companies with low leverage, foreign institutional investors tend to request improvements in governance, ES (environmental/social), and non-financial aspects, while activists tend to request improvements in financial and capital efficiency. Further analysis will be conducted to determine if this reflects differences in approach strategies.

3. Do companies approached by multiple activists have common characteristics?
Companies with large scale and high foreign shareholding ratios tended to receive more approaches from activists, but no trends were seen regarding other factors.
It is considered that the number of approaches from activists can vary depending on the circumstances of each individual company.

[Collaborative Researchers]

Professor Yumiko Miwa (Meiji University, School of Commerce / Outside Director of Listed Companies)
Specializes in institutional investor theory, securities market theory, and corporate governance theory. A leading researcher on the impact of institutional investor behavior on corporations. Key publications include 'The Future of Investor Capitalism' (Chikura Shobo).

Professor Yoshihiro Asai (Meiji University, School of Commerce / Outside Committee Member of a Major Life Insurance Company)
Specializes in insurance theory, corporate finance theory, and financial education. Served as a Special Researcher at the Financial Services Agency's Financial Research Center. Key publications include 'The Role of Insurance in SME Finance' (Chuo Keizai Sha).

Professor Tsuyoshi Yamada (Seijo University, Faculty of Law / Outside Director and Auditor of Listed Companies)
Specializes in company law, financial law, and capital market law. Based on empirical legal research, he has extensive experience as an attorney dealing with hostile takeovers and hedge funds. Emphasizes the mid-to-long-term interests of listed companies. Key publications include 'Financial Liberalization and Protective Legislation' (Chuo Keizai Sha).

In addition to the three professors, the analysis was conducted by Researcher Qingyi Tai (affiliated with Meiji University at the time, currently Assistant Professor at Nihon University), who was a member of Professor Miwa's laboratory.

As this research report is shared only with listed companies that participated in the survey, please contact the email address below for detailed information or requests for interviews/articles.

[Contact for Inquiries]

Mitsubishi UFJ Trust and Banking
Corporate Consulting Department, Planning Group
Mail: cc-planning_post@tr.mufg.jp