TCI Bets Against Japan’s Biggest Companies

Apr 6 2009 | 2:04am ET

Just months after abandoning a highly-publicized activist battle in Japan, The Children’s Investment Fund is switching strategies in the country.

The London-based hedge fund has reported about US$1.2 billion in short positions in Japanese stocks, including some of the country’s biggest names, Bloomberg News reports. According to the filings, required under the short-selling restrictions Japan imposed in October alongside the world’s other major financial powers, TCI is shorting 13 Japanese stocks.

Among the companies TCI is betting against are Toshiba Corp. (4.2% short interest), Sharp Corp. (1.5% short interest), Mizuho Financial (0.9% short interest), Sony Corp. (0.7% short interest), Mitsubishi Heavy Industries (0.6% short interest), Olympus Corp. (0.3% short interest) and Bridgestone Corp. (0.2% short interest).

Last year, TCI lost a proxy battle with Electric Power Development Co., Japan’s largest electric utility. The hedge fund took a US$130 million loss in October when it dumped its stake in the company, better known as J-Power.

All told, TCI posted a 43% loss last year.

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