Sparx Cuts Costs, Losses

Feb 17 2010 | 2:03am ET

Assets under management, fees and revenue are all down at Asia biggest hedge fund firm. But Sparx Group has also imposed draconian cost cuts, helping cut its nine-month loss by more than three-quarters.

Sparx President Shuhei Abe has made it his mission to return the firm to profitability after it suffered its first-ever annual loss in its last fiscal year. It will need a heck of a fourth fiscal quarter to do that, but at the very least Sparx is on the right track.

The firm posted an ¥896 million (US$10 million) loss in the last nine months of 2009. Not good, to be sure, but a good deal better than the ¥4.01 billion (US$44.5 million) loss it suffered in the year-earlier period, thanks to a 46% decline in operating costs.

Unfortunately for the firm, everything else is lower as well. Revenue is down 36% to ¥6 billion (US$66.6 million), management fees dropped 42% to ¥4.7 billion (US$52.2 million) and performance fees plummeted 76% to ¥555 million (US$6.2 million). Assets under management are down to ¥617 billion (US$6.9 billion), from ¥2 trillion (US$22.2 billion) three-and-a-half years ago.

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