Success Stories

Hoku is a Japan equities-only, long/short hedge fund established in 2017. Beginning in early 2020, we began implementing a growth plan, but unfortunately, we ran smack into the pandemic. Businesses worldwide, including Hoku, faced numerous challenges during COVID. In response, we decided to focus on the main lever we could control: the generation of consistent, risk-adjusted alpha returns for our limited partners. Proof of investment process, proof of track record, and solid business management gave us purpose and a means to proactively take control of our efforts to drive the business forward. This steady effort led to good results, and in 2021, we started to receive more inquiries and introductions as we came out of COVID restrictions. Concurrently, we also benefited from a shift in interests by international institutional investors that began to see fundamental value, opportunity, and change in the Japanese equities market.

Given international institutional investors’ continuous interest in the Japanese market, the Japan-focused hedge fund industry is in a good position to be optimistic. We at Hoku need to remain diligent about generating returns for our partners while taking advantage of the opportunity to continue efforts to build our business steadily. Considering our circumstances, specifically growth in AUM, we decided to upgrade our Pro-DIM Business registration to the regular Investment Management Business registration.

We want to thank FMEO for their support. Having a team with whom we could communicate in English was helpful for us as going through the registration process is not a usual event for anyone.

We are based in Japan and invest in Japanese equities, but our team is very diverse, and most members are native English speakers. While we had the option to register in Japanese with our Japanese compliance officer and support from our legal firm, we strategically chose the English track. This decision was driven by our desire to align our internal control processes and documentation with international standards, a move that we believe will bring significant benefits.

One of the reasons Hoku has been successful could be that we simply kept doing what we believe we are good at, trying to understand the market and generating returns for investors. A limited number of single CIO hedge funds invest in Japanese equities based in Japan; instead, many conduct business from Hong Kong or Singapore mostly due to tax incentives and somewhat lesser regulatory requirements when entering the market. But for us, Hoku needs to be in Japan to live and feel the market. Thanks to JFSA and the government’s effort to make Japan a leading asset management and financial center, the number of funds and PMs should increase, leading to our industry’s expansion along with each firm’s success. Having more competitors could raise challenges for Hoku, but we truly welcome this move, as this is a case of the “whole pie” getting bigger. There can be many winners. We are excited that our firm has an opportunity to affect and help drive this change positively. The pressure is on us and our peers to deliver.

2024 marks the 7th anniversary of HOKU's founding in February 2017. We started with a small team of three with the Pro-DIM license, and as the number of investors and AUM increased, we expanded the team one by one, with the current full-time headcount at five. With our new Investment Management Business registration, we plan to strengthen our team further by adding a few more new members in 2024, building out both the operations/control function as well as the investment team. Furthermore, we are considering adding the Investment Advisory and Agency Business registration in the future to provide advice and further build out our functionality.

As mentioned above, our goal is to provide alpha for our investors, whether that is through our hedge fund or by investment advisory. We are happy to be able to contribute to the Japanese market and investors’ success.

Our company name, “Hoku” is both the Hawaiian word for “star” as well as the Japanese word for “north”. Being a 4th generation, Japanese-American originally from Hawaii, the name Hoku brings together my roots in Hawaii as well as our future in Japan as we look forward and upward to great things for our partners, our team, and the Japanese alternative asset management industry.

Reid Ken Matsumoto
HOKU Inc.
Representative Director and CIO

Mr. Matsumoto founded Hoku in February 2017 and serves as its Representative Director and CIO. Before establishing Hoku, he worked for Credit Suisse Securities in Tokyo from 2010 to 2017, in charge of the CTE Division and Equity Trading department. Prior to Credit Suisse Securities, he served as the Co-Founder, CEO/CIO at Envision Asset Management. Before founding Envision, he held equity trading roles at Lehman Brothers and Goldman Sachs in the New York and Tokyo offices. He graduated magna cum laude from Princeton University with a degree in Economics and a certificate in East Asian Studies.