Katsunori Tanaka spent most of his 19 years at Goldman Sachs Group scrutinizing Japan’s biggest banks as an equity analyst. Now he’s making money obsessing over much smaller lenders at his ¥48 billion ($320 million) hedge fund Ariake Capital.
Tanaka’s switch centers on investing in banks whose businesses barely extend beyond the Japanese countryside — lenders that until recently were dismissed as the embodiment of the country’s decades of stagnation and deflation. Now, with prices and interest rates trending higher for the first time in a generation, things are finally looking up for the sector, even as economic prospects in many rural areas remain uncertain.
It’s been a success so far, with the fund returning more than 300% in roughly three years since its inception. Ariake recently raised money from family offices in the United States, underscoring how global investors’ renewed interest in Japan has extended to money managers who can generate returns beyond the obvious targets.