SSARIS, an alternatives affiliate of State Street Global Advisors, has closed its Japan fund of hedge funds, apparently due to low assets.

The SSARIS Multi-Manager Japan Equity Fund is thought to have had about $10 million in AUM at the time of closure, with negative returns of -3.16% in the first six months of 2012 and -1.83 % from its 2005 inception to June last year.

A State Street spokesperson confirmed the fund’s closure, but declined to provide further details. It was among SSARIS’s range of FoHFs, which have total assets of about $1 billion.

The Japan multi-manager fund was primarily managed out of New York by SSARIS’s chief executive Mark Rosenberg and chief operating officer Jim Tomeo. It invested in hedge funds which chiefly traded Japanese equities.

Its closure is indicative of the performance of Japanese hedge funds, which returned an average of 6% in 2012, according to Eurekahedge data. It is half of the 12% gains by Asia ex-Japan funds and nearly one-quarter of the 23% rise in the benchmark Nikkei 225 index last year.

In 2011, Japanese managers lost -1.3%, but outperformed the Nikkei 225, which fell -17%.  

Investors' outlook for Japan remains tepid, with the country predicted to be among the top three worst-performing regions this year, according to a new survey of hedge fund investors by Deutsche Bank.

Japan topped the rankings, garnering 36% of bearish respondent votes, followed by Western Europe (34%), and Eastern and Central Europe (32%).  In the past three years, Japan had ranked third in the survey.

The Deutsche Bank 2013 Alternative Investment Survey notes that a net 7% of investors planned to increase their exposure to Japanese hedge funds in the belief that managers will be able to take advantage of the prevailing market environment.