Former Citadel portfolio manager Takeo Serizawa will join a new Japan-focused hedge fund, teaming up with one-time Point72 Asset Management¡¯s Japan head, Tomohiro Yamaguchi, to tap investor interest in the country.

Serizawa will become chief investment officer of Hong Kong-based Invictus Investment Partners, after his one-year non-compete agreement with Citadel ended last week, the two men said during an interview. That will allow Yamaguchi to focus on risk management and business operations as chief executive officer.

Invictus is among a string of Japan-focused hedge fund startups that have sprung up. The country¡¯s corporate governance improvements and economy have rekindled investor enthusiasm. International investors are looking for funds that have the right business setup and investment approach to accommodate hundreds of millions of dollars of capital.

Japan¡¯s two main stock benchmarks have chalked up annualized returns above 6% in the last five years in dollar terms. By contrast, the MSCI China Index is down more than 2% in the same period, even after a strong rebound this year powered in part by the artificial intelligence fever. Global investor appetite continues to be weighed down by concerns about geopolitics and slowing growth of the world¡¯s second-largest economy.

The new fund brings together two professionals who honed their expertise at leading global multistrategy, multi-manager hedge funds. Both share a focus on Japan¡¯s largest and most liquid stocks. They also went to the same bilingual, cross-cultural Keio Academy of New York, five years apart, Yamaguchi said.

Serizawa made the switch to proprietary trading at UBS Group AG in 2011, 10 years after starting his financial career in sales at Nikko Cordial Securities.

The duo have known each other since 2013, when Serizawa relocated to Hong Kong to join Marshall Wace as a portfolio manager for its Japan market-neutral fund, specializing in non-export-related industries, such as retail, information technology and industrial stocks. Yamaguchi was working for Segantii Capital Management as the first Japan specialist of Simon Sadler¡¯s multistrategy hedge fund, the two said.

Balyasny Asset Management recruited Serizawa in 2016 to oversee Japan investments. As head of Point72¡¯s Japan operations, Yamaguchi made approaches to hire Serizawa as early as 2019, they added. Instead, Serizawa joined Citadel in January 2023 to manage a portfolio of the most liquid Japanese stocks.

Invictus will focus on the 300 largest, most liquid Japanese stocks and maintain a low net investment, the dollar gap between bullish and bearish bets. An anchor investor is committing $200 million of capital for at least two years, with the fund seeking to start trading in the first quarter, pending regulatory approval, Yamaguchi said in a September interview.