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News trading: Hedge fund analyzing japanese blogs

Media-based strategies are expanding further more with the introduction a new source of data: blogs. A former Goldman’s banker and an associate professor have teamed up to launch Plug AI Fund, a fund which use such source of information

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Last month we discussed the use of social networks as a source of alternative and innovative trading signals. Derwent Capital, a london-based hedge fund, was about to launch a fund whose investment signals were based on the determination of an aggregate market sentiment using "tweets".

It seems today that similar idea has been developed at the other end of the planet, more precisely in Japan. According to Bloomberg, Hideki Furusho, a former Goldman’s banker and Yutaka Matsuo, an associate professor at University of Tokyo reportedly launched last August the "Plug AI Fund", a hedge fund that invests in Nikkei 225 futures based on a computer model that analyzes Japanese blogs

With 30 million yen assets under management in August, the fundhas returned 7.5 percent through April 11. That compares with Japan’s benchmark Nikkei 225 Stock Average’s 1.9 percent return in the same period. The fund is not yet open to overseas investors but they plan to do it starting from June and they aim to raise around 5 billion yen. The fund eventually aims to expand its investment universe, such as bets on overseas futures and foreign exchange markets

Derwent Capital’s "Twitter Fund" is still in draft form. according to the firm, "higher than expected demand for twitter hedge fund causes delays. The firm is revising the corporate structure of its Absolute Return Fund Ltd which will be using Twitter to predict the stock market. Stay tuned...

Next Finance , April 2011

Article also available in : English | français

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