GLG soft closes Harker's Japan CoreAlpha fund on liquidity concerns

GLG has soft closed Stephen Harker's £1.1bn Japan CoreAlpha fund and the offshore version for a temporary period because of liquidity concerns in the Japanese market.

GLG said in a statement that the funds would soft close in six weeks time.

It said: "GLG Partners ("GLG"), part of Man Group plc ("Man"), today announces its proposal to soft close the GLG Japan CoreAlpha and GLG Japan CoreAlpha Equity funds to new investors with effect from 30th March, subject to FSA and board approval respectively.

"The funds will remain open to redemptions in the normal way."

The group is acting now because of concerns the funds' strategies could be impacted by a lack of liquidity in Japanese equity markets.

Richard Phillips, head of UK Retail at Man, said: "The large cap high conviction approach of this strategy necessitates owning a relatively concentrated portfolio of stocks.

"Since the earthquake in Japan last March there has been a reduction in liquidity in the Japanese equity market. While this has not impinged on the team's ability to manage portfolios with the desired degree of liquidity and flexibility, it has created a risk that performance could become constrained if inflows into the strategy increase.

"As a result, we are proposing this temporary cap on the funds in order to safeguard the effective management of the portfolios and protect existing investors."

The group said the funds will fully reopen as soon as it is confident market conditions in Japan have improved and allow normal trading once again, even in the event of a significant increase in assets under management in the funds.

Harker's onshore fund is one of the most successful in the market, delivering a return of 22.8% over the last three years, compared to the IMA Japan sector average of 13.6%.

The news comes amid the latest gloomy economic update from Japan, where GDP growth contracted by 2.3% in the fourth quarter.