Former Goldman Sachs Managing Directors Plan Asia Hedge Fund
Three former managing directors of Goldman Sachs Group Inc. (GS)’s Japan business plan to start an Asia multi-strategy hedge fund early next year, according to two people with knowledge of the matter.
Koji Gotoda and Takayuki Kasama have incorporated Golvis Investment Pte in Singapore, said the people, who asked not to be identified as the information is private. The fund will invest in all asset classes with an initial focus on Japan, they added.
Japan-focused hedge funds have historically traded stocks, making a company staffed by a large team of former Goldman Sachs employees and capable of investing in multiple asset classes a rarity, one of the people said. The New York-based bank, once Wall Street’s most profitable securities firm, generated about half of its revenue from trading last quarter.
“The pedigree of the principals will guarantee they at least get a good hearing from prospective allocators,” Peter Douglas, principal of Singapore-based GFIA Pte, which advises on hedge-fund investments. “After many years of slow death or exile for the Japanese hedge fund industry, it does feel as if the industry, like the country, could be on the verge of a renaissance.”
Gotoda most recently led Asia convertible bond trading at Goldman Sachs before leaving in July, said the other person. Kasama, a former co-head of Japan credit trading, left the New York-based bank in June. Both were among 272 promoted to managing directors in 2009, according to an internal memo at that time.
Nine of the about 11 initial Golvis employees will have worked at Goldman Sachs, including a third former managing director, said the people.
Ryan Collins, Golvis’s head of business development, declined to comment on the plans in an e-mail. Goldman Sachs’s Tokyo-based spokeswoman, Hiroko Matsumoto, confirmed that Gotoda and Kasama have left the firm and said she couldn’t make any further comment.
Gotoda will present his plan to potential investors at Goldman Sachs’s annual Asia hedge fund symposium in the city-state in October, according to an invitation seen by Bloomberg.
Stimulus by Prime Minister Shinzo Abe and the Bank of Japan to break two decades of stagnation has weakened the yen by 19 percent in the past year and helped double profit of Nikkei 225 Stock Average companies last quarter by making its exports more competitive abroad.
“For once the government, the bureaucracy, the corporates and the public are all pulling on the proverbial rope in the same direction,” said Stephane Pizzo, managing partner of Singapore-based investment adviser Lotus Peak Capital Pte.
Japan hedge funds returned almost 19 percent this year through July, more than double the 8 percent gain of the Eurekahedge Asian Hedge Fund Index in the first seven months.
Japan-focused hedge funds received $1.7 billion of net capital inflows in the second quarter, accounting for 56 percent of the money global investors added to Asian hedge funds in the three months, according to Chicago-based data provider Hedge Fund Research Inc. The inflows brought assets of Japan funds to $24.8 billion, the highest in five years.
Soros Fund Management, billionaire George Soros’s $24 billion family office, made almost $1 billion since November from bets that the yen would tumble, a person close to the New York-based company told Bloomberg in mid-February. Balyasny Asset Management LP, which manages $3.7 billion, hired Bruce Kirk as its first manager focused on Japan fundamental long-short strategy, Colin Lancaster, a Chicago-based senior managing director, said in an e-mail in July.
Yet multi-asset funds in Asia have often had a better record of raising money than making money, Douglas added. “Investors will look closely at the underlying investment proposition of the fund.”
Goldman Sachs traders founded some of the industry’s largest startups over the years. Former Goldman Sachs partner Eric Mindich’s Eton Park Capital Management LP began trading in New York in 2004 with $3.5 billion, with assets growing to $14 billion by 2007.
Morgan Sze, a former Asia and global head of Goldman Sachs’s principal strategies proprietary trading group, raised $1 billion for his own hedge fund that began trading in April 2011, the most by a new Asia-based startup since at least 2007. Assets of his Hong Kong-based Azentus Capital Management Ltd. hit $1.9 billion within three months.
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