GLG soft-closes Japan CoreAlpha after ‘significant’ Japan liquidity drop

GLG Partners are soft closing the £3.8bn GLG Japan CoreAlpha Equity strategy due to large inflows and “a significant reduction” of liquidity in the Far Eastern market.

The GLG Japan CpreAlpha funds, both the £1.27bn onshore Oeic and $4.1bn (£2.53bn) offshore Sicav, are restricting inflows to $1m per client each day, which will effectively bar larger investors from sizable additions.

GLG says the fund has enjoyed strong inflows over the past year and a half.

“At the same time, liquidity in the Japanese market … has been declining,” the company says.

“The combination of these factors has led the board of directors of the company, following consultation with the investment manager, to decide that the fund should limit inflows of new money in order to manage the portfolio for investors properly.”

Liquidity “remains manageable” at the current size, GLG reiterates.

The restriction will take effect from 13 October, and the fund’s board may change the restriction further.

The fund’s concentrated holdings – albeit in large cap names – was part of the reason for the decision to close the floodgates, GLG says.

“The concentrated holdings have been an important part of the returns generated by the fund, but they have also increased exposure to the combination of large inflows and shrinking liquidity identified by the risk committee and fund managers,” it adds.