Honolulu-based Bellamy Fund Management on Jan. 15 launched the Takarajima Fund, a Caymans-domiciled Japanese small-cap activist hedge fund, with less than $10 million in initial equity.
Firm founder Jason Bellamy said he sees tremendous opportunities within the Japanese small-cap space. “They’re mispriced and under-researched, and there are a lot of companies that are not necessarily distressed but could do well with a bit of cash injection,” he said.
Bellamy said his strategy differs from other activist shops such as Steel Partners because “we’re not hostile takeover artists and our targeted companies are much smaller. And because they’re smaller, we can go in and take a chunk of the company, such as 10% of its market cap, and create a significant presence overnight. We look for share placements and moving price convertible bonds with a put option that protects us from the downside, which is the lack of liquidity.”
The new vehicle will look to exit its investments within three to 12 months, added Bellamy.
The Takarajima Fund charges a 2% management fee and 20% performance fee, with a ¥10 million (US$82,000) minimum investment requirement.
Bellamy also mentioned that he would like to work with other sub-advisors in Japan who want to create their own fund structures in Hawaii and the Caymans, and is currently negotiating with a Japan equity long/short manager and a U.S.-based quantitative fund manager to that end.
Prior to forming his own firm last October, Bellamy served as private banker for the Bank of Hawaii and worked for Tokyo-based Myojo Asset Management, a Japanese long/short shop.