Mitsubishi Takes Stake In Troubled Hedge Fund

May 5 2008 | 12:33pm ET

Mitsubishi Group, which in addition to its well-known automotive position is a Japanese banking and trading giant, is making a foray into hedge funds. Mitsubishi Corp., the company’s trading arm, has agreed to take a 19.5% stake in troubled hedge fund Aladdin Capital Holdings for US$40 million.

In addition to providing the credit-crisis-hit hedge fund with a much needed cash infusion*, Mitsubishi will also team with its new partner on a joint institutional investment fund, Japan’s Nikkei business newspaper reports, with Mitsubishi providing US$300 million to set the fund up.

The firms hope to boost the J.V.’s assets to US$5 billion within five years.

With its 19.5% stake, Mitsubishi is now the second-largest shareholder in Aladdin.

*Correction: Both Aladdin and Mitsubishi say the move was not a “capital infusion” and that Aladdin is not in trouble, rather the move involved Mitsubishi taking a stake in the firm. See: UPDATE

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