Ex-Deutsche Bank Analyst Starts Japan Long-Short Hedge Fund

A former Deutsche Bank AG equity analyst, whose Japan-focused hedge fund returned almost 50 percent in three years, has started a fund that bets on rising and falling stocks in the country.

Takayuki Asakawa, 44, started the Tidal Fund with 600 million yen ($6 million) under Gordian Capital Singapore Pte and employs a long-short strategy, said Asakawa, who founded Zone Investments Inc. Tokyo-based Zone is targeting its assets to reach 5 billion yen within a year and 20 billion yen in three years, he said.

Zone Investments is trying to capture a wider range of investors, including those outside Japan, with the new offering after managing a similar fund with about $5 million in assets for a limited number of institutional investors until April. The predecessor fund returned 49.6 percent since inception in July 2011, according to a letter to investors, beating the 29 percent return by the Eurekahedge Japan Hedge Fund Index in the same period.

“There is a limit to what we can do with our strategy, so we tied up with a platform company to start offering a foreign offshore fund,” Asakawa said in an interview in Tokyo yesterday. “Our investment motto is to take our profits slowly, cut off losses at once.”

Hedge-fund managers with smaller capital are increasingly joining platforms like Gordian, which provide non-investment services, to cut costs and comply with stricter regulations that require them to devote more time to administration tasks.

Monitoring Trends

Asakawa runs the fund with Naoyuki Takahashi, a partner and chief investment officer of Zone Investments. The fund invests in about 100 to 150 stocks in Japan and targets annual return of 20 percent, Asakawa said.

Takahashi reviews 1,500 to 1,600 charts and analyzes about 500 companies in detail everyday to spot market trends that may give investment opportunities, he said in the interview.

Prior to setting up Zone Investments in 2011, Asakawa was a sales director at Japanese hedge-fund firm Darwin Capital Partners Ltd., he said. He also worked as an analyst covering chemical, paper and toiletry makers at Deutsche Securities Inc. in Tokyo, was a senior analyst at ABN Amro in Japan and managed a mid-to-small-cap fund at Fortis Investments Japan, he said.

Takahashi, 47, was formerly an independent financial adviser for clients at Nikko Cordial Securities Inc. after working in the equity sales departments of Yamaichi Securities Co. and Merrill Lynch Japan Securities Co. in Tokyo, he said.

Before it's here, it's on the Bloomberg Terminal.