Mizuho Vets. Ready Short-Term Japan Long/Short Fund

Jun 9 2010 | 12:53pm ET

With more than a two-year track record under their belt, a pair of veteran Japanese proprietary traders plan to launch a long/short hedge fund next month.

Akira Yaku and Kentaro Ishizaki will manage the new Alithion Japan Fund beginning on July 1. The fund’s strategy was seeded by Tokyo trading firm Marubeni Corp. in February 2008 with ¥2 billion; Yaku and Ishikazi have returned 18% since then.

“Irrational moves taken by investors in crisis situations create the best opportunity for a trading-oriented fund like ours,” Ishikazi told Bloomberg News. “We’ve built up our performance and with the backing of Marubeni, we thought this is a good time to start the fund.”

Ishikazi and Yaku set up Singapore-based Alithion Capital Management in November 2007, more than a year after leaving Mizuho Securities, were they were prop. traders. In addition to Yazu, who serves as CEO, and Ishikazi, who is chief investment officer, Alithion also boasts another former Mizuho prop. trader, Kai Hoshino, as portfolio manager.

The new fund will trade Japan’s 500 largest companies, with between 50 and 100 positions at any time, and an awful lot of turnover. Ishikazi told Bloomberg that about half of the fund’s investments will be traded on a daily basis. Such a fast-paced strategy will benefit from the Tokyo Stock Exchange’s plan to introduce a faster trading system this year.

Alithion is targeting annual returns of between 10% and 15%. The firm hopes to raise ¥10 billion within a year. Deutsche Bank serves as its prime broker.

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