Japan Gets First Short-Biased Hedge Fund

Jun 8 2009 | 1:05am ET

Japan’s first short-biased hedge fund has a profoundly bearish take on the country’s exporters.

Alphex Investments, which in March launched what it calls the first-ever hedge fund in Japan that is always net short, is betting that the current “bear-market rally” will burn Japan’s exports, Bloomberg News reports.

“We’re going to see a really bad yen rally this year, and that will create an opportunity to profit on exporters,” Alphex CEO Ichiro Takamatsu told Bloomberg.

The new ASB Opportunity Fund is based on its flagship hedge fund’s short book, Takamatsu said. It debuted with US$25 million in seed capital from a New York-based fund of hedge funds, and has the capacity to take in a total of ¥30 billion (US$304.2 million).

“The performance of the short book in the flagship fund caught the eye of one of our investors, and that’s how this fund started,” Takamatsu said.

In addition to betting against exports, ASB Opportunity will also short automotive and electronics stocks, as well as companies in defensive sectors like pharmaceuticals and utilities.

The short-only fund is the first in a series of launches planned by Alphex, including a long-only fund and a pan-Asian long/short equity fund.

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