Kokusai Asset Management, with JPY2.4 trillion (USD19.8 billion) under management, is considering launching a Japanese or global market neutral fund next year both of which would use derivatives, and would be its first foray into alternative investment management, according to an official in the planning department in Tokyo.
The global market neutral fund would likely be managed by an external manager and would be free to use any kind of derivative but the Japanese fund would be managed internally and would only use equity futures, the official outlined. The asset manager is currently talking to clients about the products and if it sees enough demand from institutional investors it will set up one of the funds.
The official said it would not use over-the-counter derivatives if it managed the funds internally because it does not have the in-house expertise. However because it would outsource the management of the global market neutral fund, that fund could use OTC derivatives.
The asset manager expects to launch one of the funds next year with USD30-40 million under management. If it is the Japanese fund Kokusai will cap its size at USD200 million.
