Japan Hedge Fund Buys Options, CDS Indices In Advanced Of U.S. Rating Cut

Aug 8 2011 | 12:32pm ET

R-SQUARED Asset Management may focus on Japan, but the US$220 million hedge fund still girded itself for Standard & Poor's downgrade of U.S. sovereign debt.

Tokyo-based R-SQUARED sold cash bonds and bought up put options and credit default swap indices prior to the announcement of the downgrade on Friday night, Bloomberg News reports. The moves were designed to position the fund for volatility in the post-downgrade markets.

"We're expecting volatility to remain high going forward, so we will be looking for investment opportunities in market dislocation," fund manager Tan Maruyama said.

R-SQUARED has returned 11% this year.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of