Bloomberg News

Ex-Goldman, Mizuho Bankers to Start Global Macro Hedge Fund

December 01, 2011

(Updates with analyst’s comments in fourth paragraph.)

Nov. 30 (Bloomberg) -- Edgebell Capital Co., run by former bankers at Goldman Sachs Group Inc. and Mizuho Corporate Bank Ltd., aims to start a global macro hedge fund in February that will wager on trends in stocks, bonds and currencies.

The Edgebell Capital Global Macro Strategy plans to start with at least 2 billion yen ($26 million) raised from high-net- worth individuals in Japan, said Masaru Koibuchi, chief investment officer of the Tokyo-based firm. Koibuchi and Chief Operating Officer Kazuho Suzuki are making the strategy available to outside investors by setting up an offshore fund after only offering it to domestic individuals, they said.

Former bankers at major financial institutions globally are starting hedge funds with strategies that can outperform during market turmoil. The Edgebell fund, under limited offering, returned 3.9 percent from April 14 through Sept. 30, beating the 10 percent drop by the Nikkei 225 Stock Average in the period.

“While choppy equity markets have tormented the performance of a large number of hedge funds throughout the year, the appetite and demand for more fixed-income strategies, and in particular macro funds, has consistently increased,” said Skip Hashimoto, the Tokyo-based Japan representative at Ogier Fiduciary Services, which provides administrative services to hedge funds. “Many investors are looking to diversify away from equity strategies.”

In the U.S., Ex-Goldman Sachs proprietary traders Bennett Grau and Mark Mallon are teaming up with former colleague Marc Mezvinsky to start a global macro hedge fund, according to a person with knowledge of their plans.

Demand Abroad

Koibuchi, the former head of corporate derivatives structuring at Goldman Sachs in Japan, and Suzuki, who used to head equity index investments at Mizuho Corporate, are teaming up to tap demand for global hedge-fund strategies in a nation where long-short equity funds dominate.

“We are seeing demand from investors abroad who are looking to invest in global macro funds that are based in yen,” said Suzuki, 41, in an interview in Tokyo yesterday. “Because not many are running a global macro fund, this is the time for us to start.”

The fund, which targets a 10 percent to 20 percent annual return, invests in stock indexes, including options and futures worldwide, bond markets mainly of the Group of Seven countries, currencies and exchange-traded funds of commodities, according to Koibuchi and Suzuki. It employs a strict loss-cut rule to minimize losses, and during the six months it ran for limited investors, the biggest daily drawdown was 0.4 percent, said Suzuki.

Outperforming

Global macro hedge funds declined 0.9 percent through October this year, compared with the 2.9 percent drop by the Eurekahedge Hedge Fund Index that tracks more than 2,800 funds worldwide. The Eurekahedge Japan Hedge Fund Index fell 0.8 percent in the same period.

Koibuchi, 41, who worked at Lehman Brothers Holdings Inc. as the head of derivative structuring in Tokyo, met Suzuki in early 1990s at Industrial Bank of Japan Ltd., now part of Mizuho Financial Group Inc.

Edgebell, stemming from the two Chinese characters of Koibuchi and Suzuki, signifies the concept of “edge of bell curve” that enables the fund to provide stable returns regardless of market directions, according to the firm.

--Editors: Linus Chua, Andreea Papuc

To contact the reporters on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net; Komaki Ito in Tokyo at kito@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net.


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