Tiger Cub Snoddy Posts 17% Return With New Japan Hedge Fund

David Snoddy has posted a 17% gain with a new Japan long-short fund after the Tiger Management alumnus returned to money management following a hiatus.

Snoddy, 52, who ran the Tokyo office of Julian Robertson’s Tiger before setting up Nezu Asia Capital Management in 2000, delivered the return from the Nezu Speedwell Fund’s inception in June 2019 through August this year, according to a letter to investors. Japan’s benchmark Topix gained 7% during the period. The fund, which had $31 million in assets under management as of Sept. 1, focuses on Japanese companies’ growth and capital efficiency.

“I missed managing money and I wanted to do it again,” Snoddy said in phone interview.

Snoddy said his firm closed its Nezu Asia Fund in early 2017, and shut other funds -- including the Nezu Japan Fund -- over the course of 2018 and 2019. The company needed to restructure to find “a new model and a new view of what our growth can be,” he said.

The Nezu Speedwell Fund makes long investments in companies with strong growth and capital efficiency, while shorting firms that perform less well in those areas and have downside risks to their earnings structures, according to the August letter.

Nezu Speedwell has positions in about 60 companies, Snoddy said. It’s “moderately net long” and has a medium-term investment horizon, according to a presentation on the fund.

Long Holdings

Long holdings include BASE Inc., which helps individuals and small retailers to open online stores, and IR Japan Holdings Ltd., which assists listed companies in defending themselves against campaigns by activist shareholders. BASE’s shares have surged more than sixfold this year, while IR Japan has more than doubled.

Nezu Asia is among hedge fund firms run by managers who once worked for Robertson, known in the industry as Tiger Cubs. Tiger posted market-beating average annual returns of 32% from 1980 to mid-1998, before handing back clients’ money in 2000 after losses and investor redemptions caused assets to drop.

While Nezu Asia is headquartered in Hong Kong, the fund has a strong Japan connection. Snoddy, a fluent Japanese speaker, named the company after a museum near its first offices in Tokyo. Snoddy also previously worked for the Soros Fund in Japan.

©2020 Bloomberg L.P.

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