Activist hedge funds have experienced mixed results when they have pressed Japanese companies to improve returns to shareholders. Now one western fund has decided to try its luck with shareholder activism in China.
Indus Capital Partners, a New York-based Asia focused hedge fund, has entered into a dialogue with China Mobile — a Hong Kong and New York-listed state owned enterprise and the largest mobile company in the world with 826m customers — to see if global investors can get a mainland company to focus more on raising the payout to those who hold its stock.
The experiment comes at a time when the government is assessing how to reform SOEs, which can sometimes be lean and profitable, but usually have objectives far different from companies in the capitalist west. “China Mobile is, despite outward appearances, as much a collection of bureaus as it is a proper company in a global sense,” says one investor.