Japanese Pension Funds

Japanese Pension Funds

New Fund of Hedge Funds Targets Japanese Pension Funds

A New York-based hedge fund is launching a fund of hedge funds that will target Japanese pension funds. AIFAM Inc. has launched AIFAM Hedged Equity Fund which debuted yesterday with $17 million but hopes to raise $150 by the end of the quarter.
The AIFAM Hedged Equity Fund is targeting returns of about 6% per year, founder Takuma Aoyama told Bloomberg News. The fund, which debuted with US$17 million in proprietary capital yesterday, hopes to raise US$50 million by the end of the first quarter and US$150 million in its first year.

"Japanese pension funds are faced with serious problems," Aoyama said. "We're not making any promises that we're going to offer a fund that will not be affected by the market moves at all, but instead, we're going to offer a fund that will allow investors to shrink their losses with the same capital they may invest in other asset classes."

The new fund has a capacity of about US$1 billion and invests in between 12 and 15 underlying global long/short managers, including some sector-specific managers. It will steer clear of emerging managers and those with long lockups, with a goal of being able to liquidate the entire portfolio in a month.

The fund will charge no performance fees, to avoid incentivizing its management team to take greater risks. Source

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