Sparx, CEO, Shuhei Abe

Sparx preparing to launch Equity L/S fund

Sparx Group Co., Asia’s 2nd biggest hedge fund manager, is preparing to launch a new Equity L/S fund in Q1 2011. Speaking at this week’s Bloomberg Hedge Funds Asia Summit, Sparx CEO Shuhei Abe said that the firm was looking for new ways to find growth as it consolidates following the recent sale of its Hong Kong operation to MCP Asset Management. “We have to be more creative and innovative to find new growth,” said Abe. “We have to change the way we look at things. One way to do this is to make Sparx not a Japan company but an Asian company.” The fund will target Asia’s “winners” with Japanese companies to be used as a benchmark for performance and is expected to raise USD200 million to USD300 million within its first year.

Abe congratulated Hong Kong-based Value Partners who this year became Asia’s biggest hedge fund manager. “In this business you’ve got to be there when it happens not when it happened,” said Abe. “Value Partners found a way to succeed in the Asia markets and I congratulate them on that.” Abe also confirmed that another growth area Sparx was looking at was renewable energy. “If you look at the value chain there are lots of Japanese companies involved in producing green energy,” explained Abe. The new fund is expected to invest in green technology, agriculture and food-related firms. On capital raising, Abe opined: “New sources of capital need to be long-term where the investor is more strategic than short-term in approach.” Sparx is also set to win a USD200 million mandate from an unknown overseas investor to invest in Japanese companies providing clean technologies. The Sparx Smart Grid Fund, launched earlier this year, invests in Japanese companies involved in green technologies. It currently has USD49 million in AUM.

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