An Oslo-based hedge fund's love for unloved Japanese stocks has proved to be a rewarding passion for more than a decade.

"Our model is good at identifying companies that shouldn't be listed," said Trond Hermansen, who manages Sector Zen with analyst Lars Solberg, in an interview. "We'd like to invest in companies that don't have high returns today but have a lot of cash and easily could have high returns going forward."

With the Fukushima nuclear disaster in 2011 and the global financial crisis, Japan's stock market has seen a rough decade. The Topix Total Return Index was up just 29 percent from April 2006 through May this year, compared with a 167 percent return for the S&P 500 and a 101 percent gain in the FTSE 100. Sector Zen, which makes both long and short bets on stocks, has delivered a return of 188 percent.