Goldman Vet's New Japan Fund Profits As Country Reels

Apr 15 2011 | 1:58pm ET

Timing can be everything when launching a new hedge fund, and Masaru Matsumoto could have been criticized for picking just about the worst for a Japan-focused fund.

The former Goldman Sachs trader launched his Hayate Atom Multi Strategy fund on March 15—just four days after the massive earthquake hit his country, causing a tsunami and nuclear crisis and claiming as many as 28,000 lives. But Matsumoto managed a 0.9% return in the second half of last month, despite the fund's inception date's status as the third-worst in the history of the Japanese stock market.

"This is a good time to start," Matsumoto told Bloomberg News of his quantitative hedge fund. The Atom Investment Co. founder, who in his spare time is a member of the Japanese national arm-wrestling team, said that the firm "lowered our risks to adjust to this crisis condition, but our fund depends on a model that eliminates any human emotions."

The fund will normally feature a concentrated portfolio of 30 stocks picked from a universe of only about 200 highly-liquid stocks and index futures. Currently, the fund has about 50 positions as a risk-management measure.

"I know very well the weakness for these models, so I had to make some tweaks after the crisis," Matsumoto told Bloomberg. "There is no such historic data for this sort of event, and the model strictly picks the investments based on historical data, so the more it gathers information, the more accurate the investment picks become."

Atom hopes to raise ¥2 billion within six months for its maiden fund, which has a capacity of ¥20 billion. It launched with ¥334 million.


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