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Portfolio > Alternative Investments > Hedge Funds

Nomura and PAAMCo Ready Japanese Retail Hedge Fund

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TOKYO (–A retail hedge fund of funds aimed at Japanese investors is expected to launch in early October by the asset management wing of Nomura Securities.

The new fund of funds, constructed with the advisory support of the Irvine, Calif.-based Pacific Alternative Asset Management Co., will differ from past Nomura funds of funds aimed at Japanese investors.

Previous offerings from Nomura catered to high-net-worth and institutional investors allocating US$1 million or more on a private-placement basis. The new fund will have a significantly lower minimum, US$100,000, allowing much wider access for qualifying investors. This apparently will allow Nomura to flex its muscles through its strong brokerage distribution network.

The fund of funds structure is loosely mutual fund-like in terms of its broad reach into the retail market. But the portfolio will cover six typical hedge fund strategies, including long/short and merger arbitrage, according to sources close to the firm.

Thirty individual hedge funds were expected to be included in the fund of funds. Industry observers suggested that the relatively high number of funds in the portfolio might indicate that the fund included a group of global managers rather than ones exclusively focused on Japan.

The fund, expected to be available in both a Japanese yen and U.S. dollar-denominated series, will have a 1.8% management fee. It was not immediately clear what fees might be paid on annual performance. A scaled commission rate, based on the size of investor allocations, and administration fees may also be applicable.


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