Nikko Asset Management has tapped Tremont Capital Management to help it design a new fund of hedge funds program that Nikko will make exclusively available in Japan to its Japanese institutional investor clientele.
Nikko Asset Management, one of the largest fund managers in Japan, has asked Tremont to provide it with advice on strategic allocations and manager selection. In addition, Tremont will monitor risk in the programme using tools developed by it and RiskMetrics.
“Our new partnership with Nikko Asset Management marks an important point in the development of our global hedge fund business,” says Barry Colvin, President of Tremont. “As one of the leading asset managers in Japan and globally, Nikko is well positioned to target the Japanese investment community with alternative investment products. We look forward to being part of this growing new business with Nikko.”
The Nikko fund of funds will initially be geared towards Japanese pension plans.
“We are extremely pleased to have been chosen by Nikko to assist them in developing their new hedge fund program,” says John Hock, Executive Vice President and Global Head of Sales of Tremont. “Pension funds, globally, are increasingly looking to make hedge funds a part of their portfolios and Japanese investors have voiced increased interest.”
While Nikko already provides a range of alternative investments for its Japanese clients, they are all onshore, yen-based strategies. Now, the firm is looking to broaden its horizons and provide Japanese pension funds with a global hedge fund exposure, says Masafumi Hikima, President and CEO at Nikko Asset Management in Tokyo.
“Many Japanese plan sponsors aren’t prepared to have a strong opinion about asset allocation mixes in alternative investments,” says Hikima. “They just provide gatekeepers with their target risk and target return. But they appreciate that a fund of hedge funds program involves more than just doing the due diligence on managers. They want to understand the industry trends and money flows within alternative investments. Tremont is well respected in these areas”
Tremont has been emphasizing pension plan and similar institutional business as one of its key growth areas. In the past year, the firm has been hired for its advisory expertise by a number of institutional investors in the US and Europe which are either making their first forays into hedge funds or are interested in growing their existing portfolios.
Tremont Capital Management is wholly-owned by Oppenheimer Acquisition Corp. and is an affiliate of Oppenheimer Funds, which is in turn an affiliate of Massachusetts Mutual Life Insurance Company.