Japanese Trader Readies Credit Hedge Fund

Mar 8 2012 | 1:42pm ET

Despite the turmoil surrounding the Japanese money management business, a former Mitsubishi UFJ Morgan Stanley Securities trader is planning to launch a hedge fund.

Yoshihito Asakawa's Sherpa Asset Management, founded last month, will offer its maiden fund in May, he told the Japan Times. The new fund will debut with about ¥500 million, much of it from readers of his blog.

The Sherpa fund will invest in credit derivatives and currencies, with a focus on Japan. Most of the fund's assets will be in the former, with just one-fifth invested on the foreign exchange market. In particular, Asakawa said he is looking at credit-linked notes and first-to-default notes.

Sherpa will target annual returns of between 15% and 20%, he said.

Asakawa said he hopes to raise ¥2 billion within two years and that he is currently seeking an investment management license. The fund will initially be sold only in Japan.

Asakawa acknowledged that now many not seem like the ideal time to launch a hedge fund, with many new and smaller funds in Asia finding fundraising difficult and Japan still reeling from the suspension of AIJ Investment Advisors.

"It's become a lot more difficult as a trader and as an institution to take risks," he told the Times. "The AIJ scandal has a negative impact for the fund industry as a whole, but I'm trying to take it positively that pensions will start putting more money with those that are trustworthy."


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