The FUJIMAKI JAPAN Macro fund is a Japan focused macro strategy fund. FUJIMAKI JAPAN Co., Ltd. is the investment advisor to the fund.
Interview with Takeshi Fujimaki and Yo Nakagawa
- 1. What is your current outlook on the Japanese economy and how has this affected your investment philosophy?
We maintained our constructive view on the Japanese economy that we had since the inception of the fund. We are positive on the Japanese equity markets and negative on the Japanese fixed income markets. However, with the recent appreciation of the YEN against the USD, we have somewhat scaled down our bullishness on the equity markets. On the other hand, we have raised our risk profile on the fixed income positions.
- 2. How are the duties of running the fund and marketing divided between yourself and Takeshi Fujimaki? Any other key professionals?
We are currently an investment advisor to PLAZA ASSET MANAGEMENT Co., Ltd. (PlazaAM) who manages our fund. PlazaAM provides us with the following services.
- Trade execution
- Risk Management
- Legal & Compliance
- Back Office
- Risk Management - Yo Nakagawa
- Administration - Yo Nakagawa
- Market Research - Takeshi Fujimaki & Yo Nakagawa
- Investor Communication - Takeshi Fujimaki & Yo Nakagawa
- What risk control measures do you operate and what type of risk appetite do your investors share?
We use VaR to monitor and manage the funds' risks. We have strict risk limits for the funds that we provide advice to. The followings are the risk limits:
- Risk Limit: VaR/NAV 5-10% depending on fund
- VaR parameters:
- Confidence level: 99%
- Observation period: One business day
- Data period: Recent one year
- Model : RiskMetrics RiskManager model
We trade the local markets where we have the best access.
We use options to leverage and quantify risk. We have guidelines on how much premium we spend on premium.
Risks and positions are monitored daily between ourselves and PlazaAM.
Real-time position and PL management is being performed.
We have seen a wide variety of clients interested in our fund. It is probably not easy to generalise our investors' risk appetite. However, we think in general they recognise that our fund is relatively volatile compared to other funds.
- Can you describe your investment strategy in more detail and what you feel makes your fund unique over other Japanese Macro funds. Essentially, what is your edge?
The fund is a Japan-focused macro strategy fund and takes directional trading risks in Japanese fixed income, equity and foreign exchange markets. Risk is allocated dynamically across asset classes and does not have a benchmark risk weighting.
The fund trades primarily in liquid exchange traded products as well as plain vanilla type OTC products to maintain a high liquidity profile. It will concentrate its exposures to market risk and will avoid liquidity and credit risk. Option products are the means to leverage and quantify the risk.
The edge of the fund is that it has grass root information gathering through contacts across industries in Japan and that adds significant value to its medium- to long-term macro economic analysis.
We are based in Tokyo and both of us have extensive experience of trading the Japanese financial products.
- You have recently launched the offshore version of this fund. How has the capital raising been going? What is your capacity?
We successfully launched our offshore fund in November. It has both a USD and JPY class for investors to participate. As of end of November, we have raised $1 million. We have another JPY300 million in December. We hope to raise $300 million for this fund.
- Why do you exclude UK and US investors from allocating to your fund?
We are currently working on to make sure that we are able to accept US and UK investors. The US investors are the largest investors in the hedge fund business. We are seeking investors all round the world.
- What made you choose Plaza as the fund's management company as opposed to acquiring a licence for yourself?
We would like to make the best use of our limited resources. PlazaAM has a long history in the asset management business but has a new management team that is focused in developing the Japanese alternative investment asset market.
Left: Takeshi Fujimaki / Right: Yo Nakagawa