Tokyo Broadcasting System (TBS)

The fund first invested in TBS in January 2017. Our analysis concluded that TBS’s operating business is dwarfed by their securities portfolio and real estate. The shares of TBS were trading at a 36% discount to our calculated net asset value (NAV). We determined that there were several corporate governance issues and balance sheet inefficiency that could be addressed.

Click here for further information on AVI’s shareholder proposal to TBS

Corporate Governance Issues

TBS has a low ROE of between 2.8% to 3.3% over the last five years. The ISS ROE recommendation is 5.0% and our recommended minimum ROE target is 8.0%. The Board of TBS is composed of 13 TBS employees and 4 non-employee Directors. However, the 4 non-employee Directors represent companies with cross-shareholdings. This type of board composition results in a lack of accountability and supervision.


Balance Sheet Inefficiency

TBS’ balance sheet illustrates poor capital allocation. 66% of the balance sheet consists of investment securities, non-core real estate and cash.



TBS’s two largest holdings, Tokyo Electron and Recruit Holdings, accounts for 50% of TBS’s market cap. However, TBS’s share price has significantly underperformed the share price of its two largest holdings.



Over the year, AVI has sought to instigate changes in the corporate governance at TBS. We have actively engaged with the Board of TBS to discuss various actions to enhance corporate governance and balance sheet efficiency. Subsequently, TBS cancelled the entirety of the treasury shares which amounted to 8.3% of the share capital.


British Empire Trust focuses on a diverse universe of investment opportunities often ignored by mainstream investors: family controlled holding companies, closed end funds and other asset backed companies.

This ‘investing in undervalued assets’ is what makes British Empire Trust an interesting addition to your portfolio.

Tokyo Tower, Japan
AVI Japan Opportunity Trust

Key facts

AVI Japan Opportunity Trust p.l.c is referred to as ‘AJOT’ throughout the website. AJOT’s investment managers, Asset Value Investors are referred to as ‘AVI’

AJOT currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers (“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an authorised investment trust. © AVI Japan Opportunity Trust plc. 2018 Registered in England No: 11487703. An investment company under Section 833 of the Companies Act 2006. Registered Office: Beaufort House, 51 New North Road, Exeter, EX4 4EP. Managed by Asset Value Investors Ltd. which is authorised and regulated by the Financial Conduct Authority. Past performance should not be seen as an indication of future performance. The price of investments and the income may fall as well as rise and investors may not get back the full amount invested. AJOT may use gearing techniques (leverage) which will exaggerate market movements both down and up which could mean sudden and large falls in market value. Please refer to the Key Features Document for further details of the risks affecting your investment. Performance figures are cumulative and based on Price total return and do not include Plan charges. For more information, please call 03458 500181. Tax treatment depends on the individual circumstances and may be subject to change in the future. Asset Value Investors Ltd do not offer Innovative Finance ISAs.


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