Stratton Street Capital launched the HX2 Fund, managed by Japan experts Dominic McEwan and Jeff Atherton, at the beginning of April.
McEwan, who has managed the Japanese equity long/short Himeji Fund since its launch in 2000, and Atherton, who joined him last year, have over 40 years combined experience in the Japanese market. HX2 is a 2x-leveraged version of the Himeji Fund, which has returned approximately 8% per annum at a volatility of 4%-6% since its inception. Over the period the Nikkei has lost 8%.
The new fund is expected to deliver twice those returns - between 15%-20% with volatility of 8%-12%.
Himeji is a stock-picking fund with a large and mid cap bias. It is not active in futures, and has made similar performance from both the long and short sides of the portfolio whilst running an average overall 15% net long exposure. The focus is very much on distilling alpha rather than calling market direction.
"'Himeji was designed as a low risk fund that gives good steady returns over an extended period of time, regardless of market direction,' says Andrew Main, Managing Partner. 'Its returns have been produced whilst only employing an average 85% gross balance sheet. That's well below peer group average balance sheet usage. We consider HX2 to have a more usual gross position characteristic and this will appeal to a different investor base and thus widen the potential base of Himeji Strategy fans.'
Launched with approximately USD 15 million, HX2 will review its capacity at USD 125 million and on an ongoing basis.
The fund, which is yen based with US dollar and Sterling classes, is domiciled in Guernsey and listed on the Irish Stock Exchange.
Background notes: Stratton Street Capital LLP is a London based specialist Asian Alternate Investment Manager with Synthetic Warrant Funds, Japan Long Short Funds and Asian Fixed Income Funds. Current Assets under Management are around USD 300 million. It is Authorised and Regulated by the Financial Services Authority.
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