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Matthias Knab reports from the HedgeFundsWorld conference in Tokyo: AIMA Japan chairman Ted Uemae gave an overview on the size of the Japanese hedge fund industry, which has grown to approximately $40bln in H1 2004, with 80% coming from institutions. The number of newly formed Japanese hedge funds is constantly growing. Uemae anounced the publication of a report by an AIMA task force about research and access to hedge funds for institutional Japanese invstors in Q2 2005.
Noboru Terada, Executive Investment Officer of the Japanese Government Pension Fund (JGPF) warned about typical pitfalls or disappointments for hedge fund investors are not aware of backfills or the exact nature of an investable index (e.g. weighted/unweighted). Citing findings of Ibbotson associates, Terada advised institutional investors should be aware that strategies like Equity Market Neutral yielded 12.3% (1/1995 – 3/2004) , whereby after fees of 3.7% net returns were 8.6%. The alpha within this strategy proved to be 3.6%, with 5.1% stemming from beta. In Global Macro, the alpha was 1.4% and 5.2% beta. FOF setup would negatively impact alpha.
Terada called the CALPERS approach – first a $1bln investment, then some direct investments, then another $1bln investment – a “good approach”, indicating the likelyhood his fund would follow a similar strategy. Japanese industry experts say any action by the GPIF will pave the way for the rest of the country’s pension industry. Terada also explained why “it...................... To view our full article Click here
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