Published April 01, 2013
TOKYO – A former fund manager at Morgan Stanley Asset and Investment Management launched a Japanese equity long-short hedge fund on Monday, betting on interest from overseas investors after a recent surge in Tokyo stocks.
Tsukasa Shimoda, the founder and president of Galleyla Investment, said his long-short fund - the UMJ Galleyla Fund - has the capacity to take in up to 20 billion yen ($213 million). The fund will slowly close subscription when its asset size approaches capacity.
The fund, which has already received start-up capital from two foreign investors, is expected to reach capacity within one to two years, he said.
Shimoda said his fund has been gaining attention from foreign investors after expectations for Prime Minister Shinzo Abe's reflationary fiscal and monetary policies helped boost Tokyo shares by more than 40 percent since November.
It was a rare launch in Japan in the past year, after the $1.3 billion-loss cover-up scandal of Tokyo-based asset manager AIJ Investment in early 2012 rocked the fund industry, forcing many domestic pension funds to review their portfolios in hedge funds.
"I've built my confidence as I was able to produce healthy investment results after managing this fund for the last three years," Shimoda said.
In recent years, many Japanese fund managers have set up new hedge fund companies in the region's hubs in Hong Kong or Singapore, but Galleyla decided to stay in Japan.
"I chose to stay in Japan because I have my family here. I also felt it was more efficient to stay here to conduct research and to be close to companies," Shimoda said.
Shimoda joined Morgan Stanley Asset in 2001 and set up a small-capitalization Japanese equity fund in 2002, which saw its assets under management increase to about 60 billion yen.
He also worked as a fund manager for an asset arm of Japan's Mitsubishi UFJ Financial Group <8306.T> prior to Morgan Stanley.
Shimoda set up Galleyla in 2010 after departing from Morgan Stanley in 2009.
(Reporting by Chikafumi Hodo; Editing by Chris Gallagher)