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Komfie Manalo, Opalesque Asia:

Japanese hedge funds, even the smaller ones, can offer attractive niche strategies from global allocators' perspective, Kenya Yonezawa, a representative of Japanese asset management firm Sompo Japan Nipponkoa Asset Management, said during the latest Opalesque 2016 Japan Roundtable. Yonezawa said that that Japanese equity long-short is a very good investment option and alpha source for adding diversification benefits.

Yonezawa added though that the number of hedge fund launches in Japan, as well as the money they raise, are not comparable to global average. He said that the average assets under management (AUM) of the Japanese equity long-short are small if compared to current global equity long-short strategies. Globally, there are quite a few hedge funds with multi-billion assets, but in Japan, the average fund size is between $100m and $300m, some managers are even managing less than $100m.

He explained, "If we look back to late 1990s, we experienced the technology bubble, where internet related or electric exporter names had a huge valuation. On the other hand, value names or old-economy type stocks did not perform so well at that time. But after year end of 1999, when the bubble started to collapse, Japanese equity long/short managers performed extremely well, because they were long very cheap smalle......................

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