Shinsei Bank has closed the third tranche of the Shinsei Protected Japan Trust, a yen-denominated, multi-strategy fund of funds focused primarily on the Japanese market. Raising about $20 million, Shinsei has continued the success of the first two tranches, which raised $30 million and $20 million respectively. Investor Select Advisors is the sub-advisor.
However, that isn't the end of the story, as Nick Bullman, chairman of ISA, says that further tranches are possible. "As long as the fund continues to perform as it has been doing, we're looking at a fourth and even fifth tranche later this year," he says. "The target is to have between $300 million and $400 million in the fund. About $500 million would be capacity."
The fund, managed by ISA, is distributed to Shinsei Bank's high net worth individual client base. The ISA trading series rose an estimated 47bp the year to the end of May, outperforming the Nikkei by 1.33%.
Bullman says that although the volatility of the Japanese market has not made things easy, the style allocation in the fund means it is a well-balanced market neutral product. The product includes long/short equity, event driven and convertible bond arbitrage funds. He feels this product is ideally suited to the current climate in Japan and to Japanese customers.
"The Shinsei product is yen-denominated and gives investors exposure to the market in a very conservative and managed way," he comments. "The product is principal protected."
The Shinsei Protected Japan Trust began life as Ichibanboshi. Seeded by ISA, it ran for several months before it was presented to various parties, one of which, Shinsei Bank, expressed great interest. ISA also has a relationship with Mizuho Bank in Japan, which distributes other ISA products.
ISA set up another fund of hedge funds just nine months ago, called First Light, which is an Asia ex-Japan fund.
"We will be looking to launch it in Asia aimed at both institutional and high net worth clients," he concludes. "After a year, so in a few months, we will approach various banks to link up with, as we have with Shinsei and Mizuho in Japan."