3D Welcomes ISS Support for Its Director Candidates at Fuji Soft

Agrees with ISS that Independent Outside Directors Are Needed to Enhance Board Oversight

Urges Shareholders to Vote “FOR” All Four of 3D’s Independent Director Candidates

TOKYO–(BUSINESS WIRE)–3D Investment Partners Pte. Ltd. as investment manager of 3D OPPORTUNITY MASTER FUND (together, “3D,” “we,” “us” or “our”) today announced that Institutional Shareholder Services (“ISS”), a leading independent provider of proxy research and vote recommendations to the institutional investment community, has recommended that shareholders of Fuji Soft Incorporated (“Fuji Soft” or “the Company”) (9749.T) vote “FOR” three of 3D’s director nominees – Shintaro Ishimaru, Yuya Shimizu and Takashi Tsutsui – at the Company’s Extraordinary General Meeting of Shareholders (the “EGM”), to be held on December 4, 2022.

In its report, ISS concluded that “[3D] has presented a compelling case that change at the board level is warranted,”1 finding that “Fuji Soft’s inefficient capital allocation, poor operational performance and relatively low payouts to shareholders are arguably the result of suboptimal corporate governance.” ISS noted that the election of three of 3D’s candidates, with their “corporate governance, senior management and capital allocation experience would help [Fuji Soft] reevaluate [its] real estate ownership strategy and contribute to the debate on optimizing Fuji Soft’s corporate governance structure.”

ISS also noted:

  • “Fuji Soft’s total shareholder return has substantially underperformed the median of its peers over the three- and five-year time periods through Feb. 17, 2022, the day of [3D’s] press release announcing the board nominations for the March 2022 AGM.”
  • “Fuji Soft’s depressed valuation and poor stock performance appear directly linked to the company’s subpar operational performance and suboptimal capital structure.”
  • “Operating performance has lagged behind peers over a prolonged period. Despite some improvement in recent years, the operating margin remains at the bottom relative to peers. The company’s ROE and ROIC have substantially underperformed the peer median over the last five years. This chronic underperformance vs. peers in terms of ROE and ROIC is at least partly due to Fuji Soft’s suboptimal capital structure.”
  • “[Fuji Soft’s] high amount of fixed assets (fixed assets represent c. 42 percent of current market capitalization, which is more than three times higher than the peer median) seems unusual for a company that operates in an asset-light sector such an IT system development and services.”
  • “Over the last five years, the company has invested what appears to be a disproportionately high amount in capex when compared to peers. Total capex for the period FY17-21 was 40 percent of cumulative EBITDA, more than four times higher than the peer median.”
  • “Low payouts to shareholders have been another issue of contention. The recent changes to the dividend policy (targeting at least 30 percent dividend payout going forward) seem to indirectly acknowledge that management’s capital allocation practices have been inadequate, particularly in the context of significant capex arguably unrelated to core business operations.”

3D agrees with ISS that Fuji Soft’s “unwillingness to acknowledge and address earlier the concerns raised by shareholders suggests that a robust outside presence on the board may be necessary to instill a greater sense of urgency.” As ISS notes in its report, the current Fuji Soft Board is “dominated by insiders and appears to be under the strong influence of a founder/director with an over 50-year tenure.”

Though the incumbent Board would have shareholders believe that the Corporate Value Enhancement Committee is taking decisive action to address the shortcomings above, ISS notes that the formation of the Committee was “a response to the continued pressure exerted by 3D.” ISS further notes that, by supporting two of 3D’s candidates, Fuji Soft “indirectly acknowledges the shortcomings of the current board composition.” Worryingly, as ISS points out, it appears that Fuji Soft is seeking to add its own director candidates “in order to water down [3D’s] influence if [its] nominees are elected.”

We therefore strongly believe that the election of all four of 3D’s candidates – Shintaro Ishimaru, Kotaro Okamura, Yuya Shimizu and Takashi Tsutsui – in addition to one of the Company’s candidates, Hikari Imai, is critical to ensuring that the Board is comprised of directors with the expertise and independence necessary to thoroughly and objectively evaluate Fuji Soft’s opportunities to increase corporate value.

With respect to 3D’s candidates, ISS noted:

  • Okamura and Tsutsui each bring valuable capital markets and senior executive experience.”
  • Ishimaru brings relevant IT industry experience as [a] senior executive of ITOCHU Corp and could help the company address its persistent issues with operational performance and low margins. He also brings valuable public company board experience as an audit and supervisory board member of ITOCHU Techno-Solution Corp.”
  • Shimizu brings extensive real estate investment and capital allocation experience as an institutional investor in real estate and public equities. He also brings relevant corporate governance expertise and [a] strong focus on corporate value improvement from the perspective of capital markets.”

3D urges Fuji Soft shareholders to support enhanced independent Board oversight by voting “FOR” all four of 3D’s nominees.

About 3D Investment Partners Pte. Ltd.

3D Investment Partners Pte. Ltd. is an independent Singapore-based Japan focused value investing fund manager founded in 2015. 3D Investment Partners Pte. Ltd. focuses on partnering with managements who share its investment philosophy of medium- to long-term value creation through compound capital growth and a common objective of achieving long-term returns.


This press release is provided for informational purposes only and does not constitute an offer to purchase or sell any security or investment product, nor does it constitute professional or investment advice. This press release should not be relied on by any person for any purpose and is not, and should not be construed as investment, financial, legal, tax or other advice.

3D Investment Partners Pte. Ltd. and its affiliates and their related persons (“3DIP”) believe that current market price of Fuji Soft does not reflect its instinct value. 3DIP acquired beneficially and/or economic interest based on its own idea that Fuji Soft securities have been undervalued and provides attractive investment opportunity and may in the future beneficially own and/or have an economic interest in, Fuji Soft securities. 3DIP intends to review its investments in the Fuji Soft on a continuing basis and, depending upon various factors including, without limitation, the Fuji Soft’s financial position and strategic direction, the outcome of any discussions with Fuji Soft, overall market conditions, other investment opportunities available to 3DIP, and the availability of Fuji Soft securities at prices that would make the purchase or sale of Fuji Soft securities desirable, 3DIP may, from time to time (in the open market or in private transactions), buy, sell, cover, hedge, or otherwise change the form or substance of any of its investments (including the investment in Fuji Soft securities) to any degree in any manner permitted by any applicable law, and expressly disclaims any obligation to notify others of any such changes.

3DIP provides no representation or warranty, either expressed or implied, in relation to the accuracy, completeness, or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets, or developments referred to herein. 3DIP expressly disclaims any responsibility or liability for any loss howsoever arising from any use of, or reliance on, this press release or its contents as a whole or in part by any person, or otherwise howsoever arising in connection with this press release. 3DIP hereby expressly disclaims any obligation to update or provide additional information regarding the contents of this press release or to correct any inaccuracies in the information contained in this press release.

3DIP disclaims any intention or agreement to be treated as a joint holder (kyodo hoyu sha) under the Financial Instruments and Exchange Act of Japan, a closely related party (missetsu kankei sha) under the Foreign Exchange and Foreign Trade Act with other shareholders, or receiving any power or permission to represent other shareholders in relation to the exercise of their voting rights, and has no intention to solicit, encourage, induce or require any person to cause other shareholders to represent such voting rights.

3DIP does not have the intention to make a proposal, directly or through other shareholders of Fuji Soft, to transfer or abolish the business or asset of Fuji Soft and/or Fuji Soft group companies at the general shareholders meeting of Fuji Soft. 3DIP does not have the intention and purpose to engage in any conduct which constricts the continuing and stable implementation of business of Fuji Soft and/or Fuji Soft group companies.

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In respect of information that has been prepared by 3DIP (and not otherwise attributed to any other party) and which appear in the English language version of this press release, in the event of any inconsistency between the English language version and the Japanese language version of this press release, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.

1 Permission to use quotes from ISS report was neither sought nor obtained. Emphasis added.


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