Kingo Tanaka, who ran Japan’s best-performing hedge fund in 2008, plans to start offering a new strategy that invests in Nikkei 225 options and futures.
Tanaka, who joined Tokyo-based investment firm Meiji Bussan Co. in April 2009, will use his own computer model for the Japan Alternative strategy. His DragonHorse fund, which returned 27 percent in 2008, was closed by Kanetsu Asset Management Co. after the collapse of Lehman Brothers Holdings Inc. cut the trading volume of commodities contracts in which the managed futures fund had invested.
“The commodity markets were simply too small, so our next challenge is in the equity markets,” Tanaka, 47, said in an interview in Tokyo. “We’re finally making a comeback.”
Tanaka is joining a growing number of hedge funds globally that are starting to employ computerized models in a bid to win investors seeking funds that can navigate through volatile market moves. His former venture, Kanetsu Asset, closed down in March 2009 as Japan’s dwindling commodities market and regulatory hurdles to combining commodities trading with financial securities weighed on the business.
Meiji Bussan will offer the Japan Alternative strategy through managed accounts that are tailored for each investor and will have a maximum capacity of about ¥5 billion, Tanaka said.
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