The AlphaWeek and Sussex Partners Japan Hedge Fund Industry Survey, 2025 Edition
Welcome to the 2025 edition of the AlphaWeek and Sussex Partners Japan Hedge Fund Industry Survey.
This year’s edition is the sixth, and we are grateful to the 27 individuals and firms that took the time to participate this time.
Last year, the equity markets story in Japan was the TOPIX hitting new highs in July and then plunging 12% on August 5th, before recovering almost as quickly. Public equity market performance is notable in the Japanese market due to equities being, by far, the largest underlying exposure of the funds that comprise the industry, and Patrick Ghali, Managing Partner at Sussex Partners, co-producer of this report, has some interesting observations about how Japanese hedge funds performance compared against the TOPIX – and why – in his annual Japanese Hedge Funds 2024 Review And 2025 Outlook article.
Last year is also notable for the Bank of Japan ending its long-standing negative interest rate policy. In March, the BoJ put the rate in positive territory at 0.1%, a move designed to mitigate inflationary pressures; the rate increased to 0.25% in July and in January 2025 it hit 0.5%, the highest since the autumn of 2008.
Onto some of the highlights of this year’s survey. Japanese hedge fund managers continue to be strongly of the opinion that global investors don’t pay them enough attention (77.78%) but what is notable here is that this is a data point that continues to fall. In the 2024 edition, that number was 82.14% and in 2023 it was 91.30%. It’s a slightly better picture in terms of domestic Japanese investors, with almost 26% of survey respondents saying that local capital pays the space some attention.
One observation that stood out last year was that 57% of respondents do not consider ESG when entering into a position, and that number is up significantly to 74.07% this time. Of the approximately 25% of those that do consider ESG, none look at environmental concerns – governance (85.71% of those that do) is by far the leading pillar of the ESG stool for Japanese hedge fund managers.
Elsewhere, a strong majority think that both the Japanese Stewardship Code (almost three-quarters) and the Japan Corporate Governance Code (more than 90%) have been a benefit to their strategies.
Last year, every single one of those surveyed suggested that they were bullish about their medium term prospects in terms of delivering alpha. This year, that falls slightly to 92.59%, but the bulls remain significantly in the majority.
I hope you enjoy reading the 2025 edition of the AlphaWeek and Sussex Partners Japan Hedge Fund Industry Survey; click the link below to download this year's report.
Greg Winterton
Founder, Managing Editor
AlphaWeek
The AlphaWeek and Sussex Partners Japan Hedge Fund Industry Survey, 2025 Edition
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