Land of the rising funds

The Japanese hedge fund market is now firmly established as an asset class, but fund managers believe a more aggressive attitude toward the development of the market is needed. Toby Garrod reports

A year ago, the Japanese hedge fund industry was poised to bloom within a favourable environment of uncertain stock prices and growing familiarity from investors, both internationally and locally. Fifteen years of economic decline gave Japan the chance to explore the possibilities of profiting in a bear market - a concept that left traditional investments with little to shout about.

Assets under management of hedge funds allocating solely to Japan grew by 40% between mid-2003 and the end of 2004