Sparx said it would issue stock options to CalPERS as part of the deal that gives Sparx sole control over the corporate governance fund CalPERS is planning for Japan, Reuters reported. Stock options will also be issued to another partner in the CalPERS fund, Relational Investors LLC, Sparx said.
Details of both stock option deals will be set in early February and will be subject to approval by Sparx shareholders at a meeting in March, Sparx said.
Sparx, an asset management company with about $3.3 billion in funds, said that it has agreed with CalPERS and Rational Investors to set up a company, Sparx Value GP, to manage the fund. Under the pact, Sparx will inject 70% of the necessary capital for the new asset management company, CalPERS will provide 20% and Relational will pay the rest.
The new fund will invest in undervalued Japanese companies that are struggling but have strong potential.CalPERS is betting that corporate reform can revive laggard Japanese firms just as it did for bloated US conglomerates nearly two decades ago, Reuters said.