Global Economics

Ex-Morgan Japan Experts Launch New Fund


The new Shaka Japan Fund will focus on the top 250 Japanese stocks and will be managed from New York

The Shaka Japan fund has been launched in New York by hedge fund manager Shaka Capital Management. It is a new start-up, launched in January of this year with partners' capital, and has an estimated capacity of $1 billion.

Arif Imam is Shaka's business manager and is a former managing director at Morgan Stanley, responsible for global distribution of Japanese equities.

The portfolio manager is Alexandre de Bethmann who formerly worked at Federated Global and TIAA-CREF.

Shaka's trader is Douglas Butcher, who was also a managing director at Morgan Stanley where he handled client trading for Japanese equities.

Target return is 12-15% per year on a Sharpe Ratio of 1.2 to 1.5. It is a Japan-only long/short equity fund concentrating on the top 250 stocks in that market. The focus on large-cap stocks is in part because of the very liquid state of the short borrow that lends to running a truly efficient hedged fund.

"A Japan hedge fund strategy which operates in the large-cap space can be run much more efficiently as opposed to a small- and mid-cap strategy which can become a long-only proxy when fund sizes get too large," says Imam.

"Japan's banks and corporations should be in a position to start exporting capital internationally in the next 12-18 months, thus setting it apart from its peers and this theme will start to emerge specifically from within large-cap stocks," he adds.

Service providers are Morgan Stanley as prime broker, GGK as auditor, and SS&C Fund Services as hedge fund administrator.


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