Not entirely unlike the Twitter hedge fund that launched this year, Hideki Furusho’s Pluga AI Fund will analyse blogs.The difference is that the hedge fund’s analysis hones in on information coming from just one country, Japan, and it will only look for words that will affect one futures market, Nikkei 225 futures. The twitter hedge fund uses “sentiment analysis.”
Bloomberg describes the strategy:
The fund exploits the increasing traffic of information on the Internet by tracking about 20 million blogs in Japanese with keywords that may affect the moves of Nikkei 225 futures, according to Matsuo.
Yutaka Matsuo, an associate professor at University of Tokyo, developed the web-mining model for the fund. The pair make trades based on the key-word algorithm and on other analysis. They also cash out every night.
Furusho worked at Goldman Sachs, Nomura Principal Finance and Morgan Stanley. His jobs at the firms are not clear. The profile of him on his fund’s site says that he was “proactively involved in a variety of investments,” and that he was a Vice President and investment committee member of Morgan Stanly Private Equity Asia III LLC.
Furusho and Matsuo started the fund in August, after it returned well, up 46.8%, from November 2006 through July 2010. Its returns are up 7.5% through April 11 2011.
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