NAVF’s 2025 scorecard: strong NAV, wider discount, bigger dividend
Nippon Active Value Fund (NAVF) has posted another punchy year. Net assets rose to £430.6 million and NAV per share climbed to 223.7p, delivering a +17.4% NAV total return in 2025. The share price total return was +12.3%, finishing the year at 207.0p and leaving the shares on a wider -7.5% discount to NAV (vs -3.0% at end‑2024).
The Board is recommending a final dividend of 5.52p per share (2024: 3.25p), expected to be paid on 16 July 2026, ex‑dividend on 18 June 2026. NAVF remains a capital growth vehicle first, but the premium account cancellation in March 2026 gives the Board more flexibility on future distributions.
Against the market, NAVF lagged the MSCI Japan Small Cap index (+19.8% in GBP). Since launch in February 2020, though, NAVF’s NAV is up +139.7% with dividends reinvested, well ahead of broad Japanese indices over the same period.
| Key numbers (31 December 2025) | |
|---|---|
| Net assets | £430.6 million |
| NAV per share | 223.7p |
| Share price | 207.0p |
| Discount to NAV | -7.5% |
| Ongoing charges | 1.12% (2024: 1.18%) |
| NAV total return (2025) | +17.4% |
| Share price total return (2025) | +12.3% |
| MSCI Japan Small Cap (GBP, 2025) | +19.8% |
| Proposed final dividend | 5.52p (payable 16 July 2026) |
Activism in action: Fuji Media and Hogy headline a busy year
NAVF’s strategy is clear: buy undervalued Japanese companies and unlock value via direct engagement. That playbook delivered two standouts in 2025.
Fuji Media Holdings: big buyback, swift exit
After public engagement around governance failings, Fuji Media Holdings surged more than 100%. On 3 February 2026 the company announced dividend increases and, crucially, a ¥235 billion share buyback – around 30% of outstanding shares – executed the next day via Tostnet 3 at ¥3,839. The sizing allowed NAVF and fellow activists to exit with an approximate 150% profit. If the shares drift, NAVF notes it can always return.
Hogy Medical: tender offer and reinvestment
Hogy rose +32.9% in 2025, culminating in Carlyle’s tender offer at ¥6,700 per share announced on 17 December 2025. NAVF agreed to tender and reinvest part of the proceeds into a Carlyle-led limited partnership – still within the trust’s 10% unquoted limit. The transaction valued NAVF’s 8.58% holding at about £62.4 million and closed in March 2026, freeing capital for new targets while retaining upside in the private vehicle.
What drove and dragged performance
Top contributors combined strong stock moves with NAVF’s engagement angle:
- Fuji Media Holdings: average portfolio weight 9.1%, total return +101.9%, contribution +7.0%.
- Hogy Medical: 11.8% weight, +32.9% return, +3.3% contribution.
- Teikoku Sen‑I: +32.1% on defence exposure and earnings improvement.
- Meisei Industrial: +14.1% in a trough year for client CapEx cycles.
- Meiko Trans: +29.8% with a plan for growth CapEx, buybacks and cross‑holding reductions.
Detractors were modest in scale but worth watching:
- ASKA Pharmaceutical: -7.3%. Fundamentals steady, but the “poison pill” (a takeover defence) hurt sentiment. Engagement continues.
- Sekisui Jushi: -3.3% amid WEMAS-related challenges; cash build provides a safety net and an engagement angle.
- Stella Chemifa: -3.6% despite improving margins; semis sentiment weighed in 2025, with a rebound starting in 2026.
Portfolio positioning: concentrated, activist-friendly
The portfolio ended the year with 27 holdings, skewed to small and mid caps where stakes can be meaningful. Health Care and Industrials dominate. Top ten holdings were led by Hogy Medical (14.2%), Fuji Media (8.9%) and Eiken Chemical (8.7%).
Valuation remains supportive at the portfolio level: price-to-book 1.3x, EV/EBITDA 9.3x, and adjusted cash/cross‑holdings equivalent to 28.4% of market cap. That cash and non‑operating asset cushion is precisely what NAVF seeks to monetise through engagement.
Costs, cash and gearing: lean and liquid
Ongoing charges edged down to 1.12%. Gearing is kept for opportunistic corporate actions: NAVF briefly drew £5 million in March 2025 and repaid it by July. Year-end cash stood at £9.9 million, and as at 2 April 2026 cash was 15.0% of net assets – ample dry powder if volatility throws up bargains.
On the capital side, NAVF issued 3,373,282 shares at a premium during 2025, raising £7.2 million, with a further 2.3 million shares issued post year‑end for £5.7 million gross. No buybacks were used in 2025, but the AGM will again seek authority to repurchase up to 14.99% of shares.
Policy tweaks and governance backdrop
Two non‑material policy clarifications tighten the framework: investments in other listed closed‑ended funds are capped at 10% of total assets, and the Company will not invest more than 10% of gross assets in other investment companies on the Official List.
Japan’s reform drumbeat remains a tailwind. The JPX’s push for better capital efficiency and transparency continues, with cross‑shareholding scrutiny intensifying. Activism is no longer niche in Japan – it’s part of the ecosystem NAVF is designed to exploit.
The risks in plain English
- Currency: NAVF does not hedge yen exposure. Yen weakness has been a drag in sterling terms despite strong yen-based returns.
- Discount: the shares ended 2025 at a -7.5% discount, wider than the prior year. Capital allocation and buyback discipline matter here.
- Liquidity/illiquids: unquoted exposure was £7.1 million at year‑end and will rise modestly with the Hogy reinvestment, but remains within the 10% cap.
- Takeover defences: “poison pills” at some targets can slow change; NAVF is leaning in regardless.
- Macro shocks: higher oil prices, geopolitics and rate shifts can raise volatility – which can also create entry points.
What to watch in 2026
- Ongoing engagements: ASKA Pharmaceutical, Eiken Chemical, Bunka Shutter and Stella Chemifa are explicitly flagged.
- Deployment of cash: 15.0% cash as at 2 April 2026 gives room to add to high‑conviction names on weakness.
- Discount control vs issuance: the trust issued shares at a premium in 2025; a balanced approach alongside buyback authority should support discount management.
- Dividend trajectory: post premium-cancellation, the Board has more flexibility. There’s no formal target, but the 5.52p proposal is a clear step up.
- Unwinding cross‑holdings: further progress here can be a catalyst across several positions.
My take: momentum with a margin of safety
On balance, this is a positive set of results. NAVF kept compounding through 2025, bagged two flagship activist wins, tightened costs, and proposed a meaningfully higher dividend. The discount at -7.5% gives investors a margin of safety to NAVF’s self‑help strategy, even after a year where the index ran hot and the yen dragged.
Negatives are manageable: a wider discount, modest underperformance versus small caps in 2025, and a slight increase in illiquids via Hogy’s reinvestment. But these come with the territory of activism and look well covered by process and policy.
If you believe Japan’s governance reforms still have legs – and NAVF’s track record suggests they do – then a cash-rich, unlevered activist trust on a discount with fresh catalysts lined up is a compelling proposition. Execution in 2026 will hinge on converting those active campaigns into tangible capital returns, and on sensible use of that 15% cash cushion when volatility throws opportunities your way.
