Jamie Rosenwald, who's been buying Japanese shares since 1972, says short-sighted activists are failing to make the most of one of the biggest opportunities for investors in decades.

Prime Minister Shinzo Abe's governance overhaul is about getting executives to invest excess capital, not just give it back to shareholders, says the co-founder of the $3.3 billion Dalton Investments.

Rosenwald picked his first Japan stocks as a teenager working with his grandfather, a disciple of the famous value investor Benjamin Graham. Rosenwald, who now has more than $1 billion in Japanese equities, says Abe is inspiring one of the most promising changes in how businesses are run since the collapse of the bubble economy, and investors chasing quick handouts are missing the point.