International investors are being offered the chance to invest in the New Star Japan Hedge Fund, with a tranche of $25m now available in R class shares.
The fund seeks to take advantage of corporate restructuring in Japan on both the long and the short side, a strategy which New Star claims is suited to the Japanese market as the new economic climate is producing clear winners and losers.
"Our managers are reporting sharp contrasts between companies," said Ravi Anand, director of New Star Asset Management. "Some companies are taking up western styles of management and corporate governance while others are relying on Japanese business methods."
Companies adopting western methods are proving more successful at creating excellent long opportunities - a prime example being Nissan, which since its takeover by Renault has seen profits soar. "Nissan"s share price has trebled in the past four years," Anand said.
One of the key problems Renault sought to address was the size of Nissan"s component base. "For example, before the takeover Nissan used 300 different types of ashtray, but were only selling 20 units of some of them," he added.
On the short side, managers are showing interest in value- destroying Japanese banks that are being poorly managed.
Michelle Sanders and Alastair MacGregor, the fund managers, focus on mid-cap companies and stocks rather than sectors. "They are looking for catalysts, for example a change of shareholder base or a change in management," Anand said.
The fund has achieved consistently good absolute returns, up every quarter since its launch in April 2002. By September of this year, the fund had risen by 19%, outperforming the MSCI Japan index, which reported a downturn of 7.3% over the same period.
The fund requires a minimum investment of $25,000 and is subject to an annual management fee of 2% and a performance fee of 20%. Investors have until 5 December 2003 to register.
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