The fund will launch on 16 December and be managed by Peter Nicholas.
Kay has been a portfolio manager with City Financial since last year, running its offshore non-retail Japanese equity funds Akamatsu and Akamatsu Bonsai funds, which he will continue to manage.
Prior to joining City Financial, Kay was head of the Japanese Global Cash Equity division of Credit Suisse First Boston, and before that was head of Asia at Schroder Securities. He will remain based in London.
City Financial has had a presence in Asia since 2010 and maintains an office in Hong Kong. Until now, oversight of that market was handled by the company's chief executive, Andrew Williams.
"With the increased Asia presence, including [the] office in Hong Kong, and two new funds, City Financial felt it was a good time to bring in someone to oversee this growing presence," a spokesperson said.
City Financial, in its current incarnation, was founded around 2006, when Williams and another former Invesco Perpetual executive, Rob Hain, formed a partnership to, as their website puts it, "acquire and re-invigorate smaller fund businesses and to develop and launch innovative funds for individual investors".
Their first acquisition, in 2006, was of a long-established fund manager by the name of City Financial.
Nicholas brings over 25 years' experience running Japanese equity funds including eight years based in Tokyo.
Kay's appointment follows the recent hire of Geoffrey Barker and his team to manage City Financial's new Asian macro fund, to be launched in Q1 next year.