Jason Bajaj,Nikko Citigroup managing director and head of Japanese program trading, plans to set up a USD500 million hedge fund. The Tokyo-based fund will pursue a range of investment strategies and use over-the-counter derivatives, including equity options and variance swaps, he said.
"We want to become the dominant hedge fund in the region," Bajaj said. The fund, named Triloka Capital, will likely start trading in October. "Triloka is Sanskrit for 'three worlds,'" said Bajaj, explaining that the fund has three research tenets: quantitative, regional and macro. He aims to have USD200 million under management by year end and cap the fund at USD500 million next year.
The fund will adopt a wide array of strategies and research driven trades. The strategies will include long/short, fixed income and equity arbitrage, relative value macro, event-driven trades and option gamma plays.
Bajaj is building a team to work on the new fund. "We're looking for star analysts, traders and quants," he said. Triloka recently hired Gareth Phillips, former head of operations at Eifuku Investment Management, as cfo. Eifuku was a prominent USD300 million-plus hedge fund in Japan that shut its doors in January after trading losses. Phillips could not be reached.
A rival program trading head said Bajaj is a respected veteran of the market. "He'll do well," said a hedge fund official, noting that Bajaj built Nikko Citi's program trading effort and prior to that traded equity derivatives at Deutsche Bank in Tokyo.
Deutsche Bank, Goldman Sachs and UBS will act as the fund's prime brokers. "All three have their own specialties," he added.
At Nikko Citigroup, Bajaj reported to John Nicolas, managing director and head of equity for Japan, Asia and Australia. Nicolas said the existing team will assume Bajaj's responsibilities, declining further comment.