Oasis launches world's first auto hedge fund
High flying Tokyo-based hedge fund start up, Oasis Advisors, has two new fund launches on the agenda. Investment advisors Eric Forday and Tetsuo Kawai, previously of hedge fund Whitney Japan, will launch a global long/short autos fund, called the Silverstone Fund on July 1.
"We believe this is the first of its kind, as there are no other global long/short funds for the autos sector," says Simon Atkinson, Oasis' COO.
Teaming up with Oasis to advise the auto fund are Saul Rubin and Takashi Ito. Rubin was previously global head of autos research at UBS based in New York, and has now relocated to London from where he will focus on the US and European auto sectors for the new fund.
Ito was previously a portfolio manager for UBS Asset Management where he focused primarily on auto research and was head of the global autos team.
According to Atkinson there are about 300 investable auto related companies globally, making up a market capitalization of about $700 billion, half of which is accounted for by Japanese companies.
"The auto sector is well suited to a long/short approach," says Atkinson. "Business fundamentals are increasingly putting this sector under pressure, creating conditions where winners and losers are likely to emerge over time. Saul and Takashi's detailed research and their understanding of management of these companies and their strategies will provide us with opportunities to take advantage of this."
Atkinson expects the fund to provide a return of around 15% to 20% per annum. The fund will be market neutral, and run with a similar risk management philosophy to the Rockhampton Fund.
This represented their debut Japan long/short Rockhampton fund, launched in in July 2003. It was closed at a record speed of four months later after surpassing the asset target of $200 million. In March 2004 the group then opened and closed the Yaraka fund in one day raising $30 million.
The targeted fund size for the autos fund is around $200 million, although Atkinson is not necessarily expecting the overnight fund raising that the Rockhampton and Yaraka funds enjoyed.
"We have a high degree of confidence in our ability to raise money for Silverstone given the capital-raising success of the Rockhampton/Oasis team, and the lengthy buy- and sell-side experience of Saul and Takashi in the auto industry," says Atkinson.
He expects the initial interest to come from Oasis' existing investors in Europe and the US, noting that half of these are fund of funds, while the rest are made up of family offices and pension funds.
Another upcoming launch for Oasis is the Barramundi fund, a market neutral quant-based Japanese equities fund. The fund takes long positions in stocks, while shorting Nikkei futures.
A parallel version of the fund currently exists and is managed onshore by a large listed Japanese institution and marketed to Japanese institutional investors. Oasis plans to launch a version of this fund that can be marketed to offshore investors. The date of launch has not yet been fixed.
The targeted size for the Barramundi fund is about $100 million. Currently the fund is returning 6% per annum, although Atkinson says the offshore version will be leveraged, and is expected to return about 10% to 12% while enjoying a low risk profile.
The Rockhampton/ Yaraka team currently has nine members based in Tokyo as well as two traders in Hong Kong. Forday and Kawai focus on the investment decisions and are supported by four analysts. Atkinson focuses on risk monitoring and is the group's COO in charge of new business development.
The Oasis Advisors' Rockhampton Fund won AsianInvestor magazine's 2004 Achievement Award for best Asian hedge fund new launch.