Global banks and asset managers are opening hedge funds in Asia for the first time since the 2008 financial crisis, putting pressure on smaller firms that are already struggling to hold onto investors.
Hedge funds are betting on another run of yen weakness, a trade that made money earlier this year for billionaire George Soros, putting them in opposition to economists who see Japan’s currency little changed into 2014.
Most stocks on Asia’s benchmark regional stock index dropped after valuations climbed to near their highest level in six months. Japanese exporters declined as the yen strengthened, while gold producers advanced.
Activist funds, which buy stakes in companies in order to force changes in their operations, are one of the hottest trends in finance. Over the past year, the money flowing into them has surged so much that their assets under management are up more than 50 percent, while those of hedge funds as a whole have risen less than 15 percent.