Having business development specialists on the ground in Japan gives firms the best chance of securing the right people, as the job requires a mix of intelligence gathering, sales savvy and parsing through noise to assess investment skill.
A hiring spree among hedge funds in Japan is reaching fever pitch. The latest must-have: talent scouts.
Hedge funds including Dymon Asia Capital, Polymer Capital Management and Lighthouse Partners have hired so-called business development specialists in the country. The firms are importing the model used in other established hubs to find the next generation of star investors, much like scouts in the NBA or Major League Baseball search for the next LeBron James or Shohei Ohtani.
Their moves reflect the surge in demand for portfolio managers, analysts and traders in Japan, which is enjoying a boom of activity after decades on the sidelines. Funds are looking to hire across equities, macro and quantitative strategies, and they're increasingly making the quest for talent in the country a full-time job.
"There's no replacement for having someone on the ground to build that network. For us, it's been a no-brainer," said Jay Luo, president of Singapore-based Dymon, a $6.5 billion asset manager which hired Kenji Harashima for Japan business development last year. "The talent pool across Asia has always been challenging."
Multistrategy, multimanager hedge fund firms have been expanding rapidly in recent years, even as employment in the rest of the industry remains stagnant. Such firms, sometimes nicknamed pod-shops, grew their combined headcount by an annualized 21% as their assets more than tripled between 2017 and 2025, according to an October Goldman Sachs Group Inc. report.
Central to their ability to deliver steady returns is the need to replenish and expand the ranks of investment professionals who trade with varied strategies. That has spurred the drive for internal talent scouts.
Many of the new Japan business development specialists come from banks. Harashima previously worked in Bank of America Corp.'s prime brokerage team. Polymer brought in Masakatsu Kondo from UBS Group AG. Lighthouse tapped Yusuke Murakami from Morgan Stanley to help recruit for its Japan-focused Penglai Peak unit.
Polymer and Lighthouse declined to comment.
Scaling Up
Japan's market has revived as the return of inflation and rising interest rates spur bond trading and corporate governance reforms push stock prices and deals to record levels. Hedge funds have taken notice.
"A lot of funds want to scale up, but they can't find the right people," said Alistair Ramsbottom, a senior manager at Tokyo-based financial recruiting firm Divine Solutions Japan, who works with business development executives to help identify candidates.
Funds are asking "what does the individual bring to the table, how is their track record, can they adapt to the fund's investment style and are they stable," he said.
Identifying the right portfolio manager or pod member has been described as finding a future NBA superstar from a large pool of college basketball players, whose past accomplishments don't always guarantee future results. And like in the movie Moneyball, business development specialists sift through data on skills and performance to determine which candidates are best for a particular pod.
Having business development specialists on the ground in Japan gives firms the best chance of securing the right people. The job requires a mix of intelligence gathering, sales savvy and parsing through noise to assess investment skill. That all goes into identifying candidates who can understand the market, manage risk and slot into a team that's often shaped by strong opinions and idiosyncratic personalities. On top of that, they need to convince the candidate to jump ship.
Multistrategy hedge funds deploy capital across a range of investment approaches and asset classes to generate market-beating returns. They typically focus on strategies such as equity long-short, event-driven, macro, credit or quantitative trading, allowing firms to weather volatility by not being overly reliant on any single bet.
At Dymon, taking the multistrategy route in Asia increasingly means focusing on Japan, which has one of the largest and most liquid capital markets in the region, Luo said. About two-thirds of its 20-person Tokyo office are investment professionals -- a number the firm is trying to grow as quickly as possible.
"Having a Japanese portfolio manager who can speak the language and directly question the CFO, the IR person, or CEO is a game changer," said Vikram Shahani, the founder of recruitment firm Shahani Associates in Tokyo.