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By Summer Zhen
HONG KONG (Reuters) -Polymer Capital Management, a Hong Kong-headquartered hedge fund, is launching two Japan-focused funds this year to tap into the robust demand for the world's third-largest stock market, according to three people familiar with the matter.
The move will see the $4 billion multi-manager Asian hedge fund heavyweight joining a wave of fund launches in Japan.
One of Polymer's new funds will adopt an equity long/short strategy and allocate capital across a team of 30 portfolio managers, with an initial target size of $500 million.
This fund will largely replicate the current Japanese book under its flagship Polymer Asia Fund, two of the sources, who are directly involved in the matter, said on condition of anonymity as the information is not public.
The second fund is an equity fund that takes only long positions, or so-called long-only fund, one of the sources said.
Tokyo-based investment veteran Daisuke Nakayama, who previously ran J.P. Morgan Asset Management's Japan fund, will lead the long-only product, the source said.
Nakayama's portfolio, since he joined Polymer in September 2023, has posted returns exceeding 20% over the TOPIX benchmark, the source added.
Polymer's track record in Japan, rising market opportunities and client interests have prompted it to double down in the country, the same source said.
A Polymer spokesperson declined to comment.
Despite recent market volatility and trade tariff concerns, Japan continues to see fund launches as global investors are drawn to its emergence from decades of deflation, corporate reform and its semiconductor firms, prime brokers say.
A BNP Paribas report showed 20% of investors they surveyed plan to add hedge fund investments in Japan in 2025.
"The 2024-25 period is shaping up to be a bumper crop year for new hedge fund launches in Japan," said Leonard Umantz, head of manager & strategy research at Rogers Investment Advisors KK.
The advisory firm estimates around 25 new Japan-focused hedge funds have launched or are in the pipeline since 2024, with multiple activist, market neutral, and fundamental equity strategy startups.
Polymer, founded by ex-Point72's Asia head Angus Wai in 2019 and backed by alternative investment giant PAG, has quickly grown into one of Asia's largest hedge fund platforms that uses various trading teams to invest across different asset classes.
Its main market-neutral Polymer Asia Fund returned 11.6% in 2024.
Polymer started a China A-shares Equity Fund in April 2024, diversifying into a single country fund for the first time.
The firm now has six offices in Hong Kong, Shanghai, Singapore, Sydney, Taipei and Tokyo.
(Reporting by Summer Zhen; Editing by Vidya Ranganathan and Himani Sarkar)
