Epic Partners Investments has launched an Asia-focused long/short equity fund, with the Tokyo-based hedge fund manager applying its experience in pairs trading in Japanese stocks to a regional strategy.
Epic Asia-Pacific Fund, which has about ¥2.1 billion ($26 million) in AUM, marks the firm’s diversification from Japan-focused strategies to a regional product.
The strategy employs pairs trading, whereby a long position is taken in one stock, while another stock – which is either highly correlated or in the same sector – is shorted. The technique has been used by Epic Partners for its existing range of Japanese hedge funds.
The new fund is based on a strategy that has been used to run a managed account with about $25 million in assets. Since its launch on June 1, Epic Asia-Pacific Fund has had a -2.8% loss in the first two months of operation, which Epic Partners attributes to a trend of stock sell-offs in the region’s markets.
Epic Partners has about $900 million in AUM across four other funds, which are Japan-focused. Hedge fund managers in Japan largely stick to running strategies with a domestic theme, but a few have forayed into other trading markets. They include Sparx Group, which launched an Asia long/short equity fund in June last year as part of the firm’s aim of becoming a regional investment company.
Bank of America-Merrill Lynch is the prime broker for Epic Asia-Pacific Fund, while Daiwa Europe is fund administrator. The fund lawyers are Maple and Calder, and Anderson Mori & Tomotsune.