Nick Bird, the head of Hong Kong-based OQ Funds Management and the the former head of Macquarie Group’s quantitative hedge fund, is looking to capitalise on renewed interest in Japan with the launch of a new strategy focused on Asia’s second-largest economy, according to a report by Bloomberg.
Set to begin trading as early as next month, the strategy will initially manage about $100m, although Bird has indicated that it has the capacity to handle double that amount.
Japan’s financial markets are experiencing a resurgence, driven by inflation and increased corporate governance efforts. Despite this, investors looking to gain exposure to Japan through hedge funds have faced challenges, often deterred by the high fees of large multi-strategy firms.
Thee report cites Bird as confirming that the initial backers of OQ’s standalone Japan strategy include a significant multi-manager investment firm with existing investments in OQ’s Asia hedge fund, and a prominent US-based institution specializing in quantitative strategies. Due to confidentiality agreements, he has not disclosed their identities.
Bird previously managed the Macquarie Asian Alpha Fund, a pioneer in the regional quant hedge fund sector, which peaked at $2bn in assets. His current four-year-old Asia Absolute Alpha Fund, which already includes investments in Japan, has achieved a 17.6% return in the first half of this year, significantly outperforming the regional average tracked by Eurekahedge Pte.
The decision to launch a dedicated Japan pool arose as investor commitments to the Asia strategy neared its $750m limit. The new Japan strategy will increase OQ’s assets under management to over $700m, with total investor commitments approaching $900m.
“We no longer have sufficient capacity in our Asian strategy to satisfy investor demand,” Bird said. “However, we have excess capacity in Japan, given the large number of liquid stocks with analyst coverage, the large number of stocks we can short, low borrow costs, and low transaction costs.”
