The Daily Yomiuri – Rising interest among investors has resulted in explosive growth of hedge fund investments in Japan, and 2006 will see both continued growth and good investment returns for an industry that is becoming mainstream.<\/p>\n
While many of the world’s large hedge fund managers failed to live up to investors’ high expectations regarding fund performances in 2005, Japanese managers outperformed the rest of the world’s hedge funds by a wide margin. As of the end of November, Japanese hedge funds in the Morgan Stanley Capital International Inc.’s benchmark index had made a return of 20 percent for the year compared to 9 percent for European funds and 5 percent for U.S. funds.<\/p>\n
The relatively lightly regulated global hedge fund industry, which until recently was only for the really wealthy, is now estimated to have around 1.3 trillion dollars in assets under management. Many pension funds have failed to meet payout obligations as their investments have performed badly in recent years. This has resulted in an increased interest in alternative investments, such as hedge funds. The same goes for private investors. The massive and fast growth of the hedge fund industry has led to concern in Japan and the rest of the world. How can investors be protected? Is too much money flowing into hedge funds? Will the big capital inflow have any negative impact on the return potential?<\/p>\n