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Einoshin Arima and Giselle Leung, former proprietary traders at Mizuho Securities Co., raised about $120 million for a new hedge fund that will bet on rising and falling stocks, mostly in Japan.

The Hareion Fund will start with money from institutional investors in Asia, according to Arima, the founder of Hong Kong-based Areion Asset Management Co. The fund, which is able to take up about $300 million, won’t accept additional money for a while to build up performance, he said.

The fund is getting a head start on other new hedge funds in the region, which have raised an average of about $12.2 million this year, according to Eurekahedge Pte. Its entry into the Japanese market comes after the benchmark Nikkei 225 stock average slumped to a 16-month low on concerns that the strengthening yen will hinder Japan’s export-fueled recovery.

“I don’t believe that Japan is going to be written off forever going forward,” Arima, 35, said in an interview Tuesday. “We view this as a good time for us to start the fund.”

Arima and Leung most recently worked at GO-TO-ASIA Investment Ltd. in Hong Kong, running GTA Atomic Fund, which also employed a so-called long-short strategy investing in Japanese stocks.

The fund returned about 80 percent since inception in December 2006 through May this year when it closed, according to an investor letter.

The Hareion Fund, which targets an annual return of about 20 percent, will invest in about 70 to 100 stocks, employing both long-short and event-driven strategies, Arima said.

In a short sale, a trader borrows stock and sells it hoping it can be bought back later at a cheaper price. Event-driven funds aim to profit from corporate actions such as mergers and spinoffs.

The fund will also allocate about 5 to 10 percent of its capital to Asia and use futures and options to hedge, he said.

The Eurekahedge Japan Hedge Fund Index has returned 1.7 percent through July, compared with a 1.2 percent advance by the global hedge fund index.

Arima said he’s focused on Japanese companies’ capital-raising plans for possible investment opportunities, declining to name any firms.

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