Hot Hedge Funds Stall in Japan; Vehicles Run by a U.S. Firm Lose Nearly a Quarter of Their Value; Jitters About Small-Cap Stocks
A TEST OF HEDGE-FUND resilience is playing out in Japan.</br></br>A fund run by U.S.-based Whitney & Co., one of the biggest in the Japanese market, has lost nearly a quarter of its value so far this year, people familiar with the fund say.</br></br>These people say Whitney New Japan Fund, which had assets of $1.3 billion at the end of 2005, has reported to investors declines of about 23% through July. Another fund, Whitney Japan Select Fund, with assets of about $200 million at the end of 2005, has dropped about 29% in the period, the people say.</br></br>Whitney declined to comment.</br></br>Whitney's predicament reflects the pain many hedge funds are experiencing amid global market volatility. The pain has been acute in Asian markets, where hedge funds in the region last year raised billions in fresh capital from investors. Whitney's struggles mirror those of dozens of Tokyo-based hedge funds.