The inaugural Sohn Tokyo conference is coming up on Oct. 16 at the Roppongi Hills Club. One of the Tokyo-based managers looking forward to presenting at it is Hideki Kinuhata, founder and chief investment officer of SILQ Capital, a Japan fundamental equity long/short manager. Hedge Fund Alpha caught up with him ahead of the conference to talk about his 24 years at Goldman Sachs, how SILQ builds its book, and where he sees the biggest mispricings in Japan today.
Sohn comes to Tokyo
SILQ is no stranger to Sohn. The firm presented at the Sohn Hong Kong conference in 2021 as one of its up-and-coming managers.
“It has been a high profile conference, so it was hard not to hear about it,” Kinuhata told Hedge Fund Alpha in written responses. “It is a big deal to us, as a manager in Tokyo, for Sohn to be held in our hometown.”
Background on Hideki Kinuhata
Before founding SILQ, Kinuhata spent 24 years at Goldman Sachs. He started out as an equity derivatives trader and ultimately became a portfolio manager.
Part of his childhood was spent in the U.S. From age 9 to 13, he lived in Northern Virginia near Washington, D.C., where his father, a telecom engineer, worked for an international consortium.
“It was a fascinating experience, where everything is so different from Japan,” he said. “It shaped me into the bilingual, bicultural person that I am today.”
An engineer’s view of the AI boom
Kinuhata studied electrical engineering at Keio University, where his laboratory researched semiconductor material engineering. That background gives him a particular view of what is happening in Japan’s tech and industrial sectors right now.
“Japanese companies have spent decades of time and money on material engineering, often for very little commercial returns,” he explained. “The AI revolution has made some of these technologies very profitable. It is a very exciting time now.”
Why he left Goldman to launch SILQ
The idea for SILQ came directly from what he saw as a portfolio manager at Goldman Sachs (NYSE:GS).
“During my time with GS as a portfolio manager, there were constant reverse inquiries to carve out our Japan portfolio,” Kinuhata said. “I believe there has been, and still is, an unmet demand for a fundamental long short fund with strong risk management capability like SILQ.”
He said the investment decision-making process itself isn’t much different from how his team operated at Goldman. What has changed is the structure: SILQ has a single CIO, a single market focus and a flat organization with a smaller team. He added that the firm also has “much clearer alignment of interest with our investors.”
As for building an institutional-grade hedge fund in Tokyo, the hardest part was the paperwork. Registering as a discretionary investment manager (DIM) took a full year. Otherwise, with help from what he called “best-in-class service providers,” the process has gone smoothly.
Foreign capital comes back to Japan
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