Akito Fund, a Japan-focused hedge fund set up by former UBS AG bankers, has returned 14% since its July start, beating benchmarks on investments in smaller companies including Geo Corp. and Yellow Hat Ltd.

Koichiro Yamaguchi and Tetsuya Hamano, who formerly worked at UBS Securities Japan Ltd. and various hedge funds, in March set up Akito Capital Co., which advises the Cayman Island fund.

Akito's entry in the Japanese hedge fund market, estimated to total about $13 billion at July 31, came as large banks and investment funds have scaled back trading. Based on a simulation of its trading strategy, the fund had gross returns of about 30% from March through to its start, according to Yamaguchi.

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