Asia’s largest hedge fund firm is bouncing back from its first-ever annual loss. Tokyo-based Sparx Group posted a ¥119 million (US$1.3 million) profit in its fiscal first-half, it said last week.
The hedge fund credited lower tax payments for the improved performance. Sparx’s tax bill fell by ¥1.16 billion (US$13 million) in the six months ended Sept. 30.
Certainly, no other major performance metric accounts for the firm’s turnaround. Revenue fell 37%, management fees dropped 46% and performance fees 73%. Assets under management, which stood at ¥631 billion last month, are down nearly 70% from their peak three years ago.
But the cost-cutting measures and layoffs have paid off. The firm said its operating costs fell by 44% during its fiscal first-half.
“Our efforts have paid off in terms of cost-reduction, but we are still struggling to capture demand from investors when it comes to Japan-related investments,” CFO Mikio Fujii told Bloomberg News. “We are hoping that our reorganization plans will start to be reflected more in the second-half earnings.”
Sparx posted a ¥23.3 billion (US$260.5 million) loss in the fiscal year ended March 31.
