Hedge funds bet Japan reforms have further to run at Sohn Tokyo

By Summer Zhen and Rocky Swift Tokyo, Oct 16 (Reuters) — The next phase of Japanese corporate reform took center stage at the Sohn Conference in Tokyo, as hedge fund managers highlighted investment opportunities ranging from a financial conglomerate's capital allocation strategy to an X-ray scattering firm's AI solutions. At the inaugural Sohn Conference in Japan, which invited 14 funds to pitch their top investment ideas, more than half of the investors favored the theme of corporate reform. Daisuke Nakayama, a portfolio manager at Hong Kong-headquartered Polymer Capital, picked Orix Corporation, a financial services firm, saying the change in management marks "a big turning point" for the company's transformation into a global investment firm. "The new leadership has a greater focus on capital allocation and ROE," Nakayama said, adding the firm is now using overseas capital, including from Qatar Investment Authority, to bid for companies. The number of activist campaigns in Japan hit a record last year, according to brokerage Jefferies, after years of pressure from regulators and the Tokyo Stock Exchange on companies to improve shareholder returns and invest in growth. Beyond Div