Juggernaut Asia Fund, set-up by former Lehman Brothers‘ managing director Yashwant Bajaj, has returned 45 percent since its August 1 launch by mainly betting on equity capital market deals and shorting companies such as scandal-hit Olympus Corp.
In an interview with Reuters, Bajaj said that while the long/short strategy had contributed the least, the short-term trading and event-driven strategy had produced two-thirds of the returns. About a quarter of the return had come from capital market deals.
The hedge fund gained 32 percent in October alone, with gains in six out of the seven initial public offerings and secondary deals in which it participated. Long position on China H shares also helped as the China Enterprises Index surged 18 percent.
“In Japan, our short positioning and trading around Olympus was a notable contributor as were our technology long book names,” Bajaj said in a letter to investors for October.
Olympus shares plunged almost 50 percent in October on news the 92-year-old maker of endoscopes and cameras had made hundreds of millions of dollars in controversial payments to acquire British medical equipment maker Gyrus in 2008.
Bajaj said he was currently running his own money worth about $5 million and would start marketing the fund in the first quarter of next year to former clients and family offices and was in talks with hedge fund seeders to raise assets.
He said the fundraising climate for hedge funds was tough but he expected to raise $5 million over the next two months and grow the fund assets to $30 million by August 2012. The fund had the capacity to take in a couple of million dollars, he added.
“Most of the money is my own and my family’s money. That personal commitment should give people some comfort,” he said.
Bajaj, who has 20 years of sell-side experience in Japanese and Asian equities, founded and ran Hachiman Capital Management’s Japan-focused hedge fund between 2005 and 2010.
The fund, which produced a 102 percent return including 4 percent in 2008, managed peak assets of $200 million in September 2008. He shut down the fund with $40 million under management in December last year after the two partners decided to separate and launched Juggernaut Asia Fund in August 2011.
“I have relaunched the same fund structure but have broadened it out to be an Asia fund,” Bajaj said.
The fund targets a 20 percent return with a concentrated portfolio of 25 to 35 positions.