Japan Hedge Fund Arena Misses Rally

May 16 2013 | 12:37pm ET

Arena Capital Management is a market-neutral hedge fund—and market-neutral is not necessarily what one wants to be in Japan these days.

The year-old hedge fund, led by Highbridge Capital Management veteran Toby Bartlett, is up 2.6% this year. Globally, that's slightly below average. For a fund that is 100% invested in Japan, it's a good deal worse.

The average Japan-focused hedge fund soared 19% in the year's first four months, as new Japanese Prime Minister Shinzo Abe's economic policies have the country's stocks rallying. But Barlett is undeterred, despite targeting double-digit annual returns.

"There is ample demand for market-neutral hedge funds," he told Bloomberg News. "Considering the large directional move in the market year-to-date, we believe that low-volatility market-neutral strategies are an even more attractive option for investors."

Arena lost 0.3% in three months of trading last year.


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