Monthly Archives: December 2011

As Japanese pension funds’ appetite for hedge funds grows, BFC Asset Management is expanding its business with two new hires. This brings the firm’s Tokyo-based staff to 23.

The Eurekahedge Japan Hedge Fund Index for November was an estimated -1.13% which brings the YTD number to -1.97%.

 

The Eurekahedge Asia ex-Japan Hedge Fund Index for November was an estimated -3.68% which brings the YTD number to -11.31%.

RSR Capital in Singapore is returning money to external investors. It is understood that the hedge fund firm may have plans to change its investment strategy for a possible relaunch in 2012.

HFC Advisory Group, the alternative investments consulting firm set up in Tokyo earlier this year by former investment banker and industry veteran Stefan Nilsson, has recruited H.S.H. Prince Andreas v.u.z. Liechtenstein to its board.

Eashwar Krishnan (ex-Lone Pine) and Tanvir Ghani (ex-Asian head of cap intro at Goldman Sachs) are planning to set up an Asian hedge fund.

J Flag Investment

Hisashi Osezawa, CIO and CEO, J Flag Investment

 

Can you tell us a bit about J Flag Investment?

J Flag, established in May 2009, is a registered investment advisor based in Tokyo. We specialise in the Japanese small cap equity space and manage both long only and long/short strategies. Our current AUM is around US$80 million. We have a broad client base consisting of retail and institutional investors. The core members of our team are ex-JP Morgan Asset Management colleagues.

 

What is your own background?

I have over 20 years’ experience in asset management and have been managing Japanese equity products for 14 years. Prior to establishing J Flag, I was managing director and senior portfolio manager of the JF Japan Portfolio Group at JP Morgan Asset Management.

 

Describe your investment strategy and why it differs from what other fund managers are doing.
Our strategy is based on rigorous fundamental research. We believe that the market is inefficient and with a rigorous bottom-up research effort, we can extract superior returns especially in the mid- and small-cap sector. We believe that our investment experience in this space in combination with our extensive research effort can produce an information advantage over our peers. We focus on finding stocks that could grow five or ten times and believe that this approach could be effective in protecting the principal as well. In order to reduce the risk of drawdown and to determine the investment opportunity, we also look into the macroeconomic environment and market and sector trends.

 

What investment themes in Asia do you see as the most attractive at the moment?

The Japanese mid- and small-cap equity space. Valuation is simply just too cheap and unreasonable. From various indicators we are assessing indications that the market will start to turn around.

 

How has your approach to risk management changed in recent times?
Our risk management approach has not changed. In principle, if there is a situation where we cannot properly predict possible outcomes we simply tend to get out of the market.

 

Do you see changes in regulation as a threat or an opportunity?

We believe that there is no impact on us.

 

Fundraising in Asia: as Asian investors increase their hedge fund allocations, do you think Asian managers will start to benefit more or will big global fund managers get most of the assets?
We believe that all these perceptions are cyclical. Asia will always provide unique and attractive investment opportunities.

 

How did the major disasters in Japan in March impact your portfolio?

Our long bias portfolio had big drawdown at that time, though we reduced long exposure immediately after the earth quake to protect AUM. I think that liquidating the portfolio after the earthquake was an absolutely prudent investment decision. Basically, the impact of the earthquake itself was something that I could have dealt with but the impact of the nuclear disaster was a situation that was unpredictable.

 

What would you have done if you hadn’t been a fund manager?

Maybe I would have been a store manager of fastfood restaurant chain Sukiya but definitely not its competitor Yoshinoya.

(Oct 2011)

Beijing-based China equity long/short manager Ariose Capital, managed by Yi Xin (ex-Harvest Fund Management), plans to expand into Hong Kong.

Masaru Koibuchi (ex-Goldman Sachs) and Kazuho Suzuki (ex-Mizuho Corporate Bank) are launching Edgebell Capital, a Tokyo-based global macro hedge fund.