December 2025 – Dalton Investments issued the letter below publicly to the management and directors of its portfolio companies. Driven by the capital market reforms led by the government and the Tokyo Stock Exchange, Japan’s capital markets are entering a new golden era. Dalton emphasizes that this period, although challenging for management because of the rising pressure for reform from the government and the market, offers unprecedented opportunities for companies that embrace an owner’s mindset through meaningful equity ownership. The letter urges management to:
- Embed cost-of-capital into all allocation decisions
- Maintain transparency and appropriate disclosures
- Apply capital-cost discipline across all-decision making – including M&A and share buybacks
- Adopt restricted stock compensation plans and equity ownership guidelines
- Increase robust governance, with at least half of the board members being independent directors with deep capital markets expertise
Dalton remains committed to constructive engagement, supporting healthy shareholder democracy, and advancing the collective interests of all shareholders.
Read the letter here