Ex-Goldman Analyst’s Hedge Fund Reaps 300% on Small Japan Banks

Katsunori Tanaka spent most of his 19 years at Goldman Sachs Group Inc. scrutinizing Japan’s biggest banks as an equity analyst. Now he’s making money obsessing over much smaller lenders at his 48 billion yen ($320 million) hedge fund Ariake Capital.

Tanaka’s switch centers on investing in banks whose businesses barely extend beyond the Japanese countryside — lenders that until recently were dismissed as the embodiment of the country’s decades of stagnation and deflation. Now, with prices and interest rates trending higher for the first time in a generation, things are finally looking up for the sector, even as economic prospects in many rural areas remain uncertain.