Japanese Hedge Funds Do Well As Market Sinks

by Carla Johnson, InvestorsOffshore.com, London

28 August 2001

Japanese Prime Minister Junichiro Koizumi has brought hope for Japan's economy, and seems also to have created a climate in which Japanese long/short hedge funds can do well.

Four UK fund managers have raised more than $200m (€219m) for Japanese equity hedge funds launched only a year ago, and the funds have returned between 10% and 24% in a period which has seen the Japanese equity index fall by 33%.

Henderson Japan Absolute Return fund, run by William Garnett and Jeremy Hall, has raised $56m, while Martin Currie Absolute Return Fund's Japanese equity subfund, managed by Michael Thomas and Jean-Paul Temperly, has raised $35m. Henderson's hedge fund has posted returns of 27.4% since inception in July 2000, while Martin Currie's fund is up 17.7%.

Stuart MacDonald, director of alternative investments at Henderson, said: "The fund has performed extraordinarily well in a period of difficult market conditions. The Japan Absolute Return Fund has shown how it is possible to generate strong results regardless of market direction."

Odey Asset Management and Gartmore Investment Management have raised a combined sum of $124m for funds launched in October and November, respectively. Gartmore's AlphaGen Hokuto, which is managed by John Stewart, has raised Y10bn (€91m). Alex Griffiths, a Henderson alumnus now at Odey, has posted returns of 12.13% since the launch of Odey Japan & General in October 2000 and raised $41m in less than a year.

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