LONDON (HedgeWorld.com) – The Shinsei Protected Japan Trust has raised US$70 million since its February launch and announced the closing of its third tranche of funding this month.
The fund is the first hedge fund of funds offering for Shinsei Bank, which is one of the more innovative banks in Japan offering hedge funds. Forming a partnership with Investor Select Advisors in 2002, the bank decided to get involved in offering a principal- protected vehicle, which has always remained popular among Japanese high-net-worth investors.
On Feb. 1, the fund was launched with US$30 million raised primarily in December and January. A second tranche opened in March with another US$20 million being raised. The third tranche was done in June due to continued demand, effectively raising another US$20 million, according to ISA.
The underlying portfolio has outperformed the Nikkei 225, which has lost 1.8% for the year through the end of May. ISA officials remain bullish on the hedge fund market in Japan, saying that it is able to product both positive absolute returns and outperform the markets.
In the complex economic climate in Japan, the idea of principal protection has been well received. Through a guarantee provided by CDC IXIS Capital Markets, the Shinsei Protected Japan Trust is protected to a minimum of 80% with a potential for a greater percentage depending on whether the fund posts positive results during its five-year maturation.
ISA is the fund’s adviser and invests in a variety of hedge funds that focus on the Japanese financial markets. Those strategies include: long/short equity; convertible bond arbitrage; event- driven; and short-oriented investment philosophies. The portfolio’s target return is 8% to10% annually.
