Dalton Strategic Partnership

Dalton Strategic Partnership - Japan

The following piece on Dalton Strategic Partnership is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund related announcements please see our Hedge Fund Tracker Tool.
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Resource #1: (5.10.09) Hedge fund manager Steven Persky plans to start betting on companies' bad fortunes again.

Persky, who runs $1 billion hedge fund firm Dalton Investments, said on Wednesday he will re-launch his distressed debt strategy three years after liquidating two similar portfolios when the strong economy made such investing difficult.

Now that times have changed dramatically, Persky is among a handful of fund managers who expect to make money for their wealthy clients in the distressed area. source

Resource #2: (4.22.09) Another foreign hedge fund has entered the—so far fruitless—effort to improve corporate governance and transparency at Japanese companies.

Los Angeles-based Dalton Investments says it is going to try a less confrontational approach to those used by The Children’s Investment Fund and Steel Partners, who were rebuffed in activist battles in Japan. The firm, which has $818 million in assets, 70% of it invested in Japan, plans to ask nicely, sending the 70 Japanese companies it invests with letters urging them to appoint independent directors and increase share buybacks. source

Resource #3 (12.15.08) Dalton Investments LLC, the Los Angeles-based hedge fund with 70 percent of its assets in Japan, is starting a 50 billion yen ($550 million) fund that will invest in U.S. distressed assets, taking advantage of low prices.

The fund has raised about 10 billion yen from U.S. investors and will begin marketing in Japan by the end of March, said Junichiro Sano, chief executive officer of Dalton’s local unit. It will invest in bonds sold by U.S. companies that once had AAA ratings and have since been downgraded below investment grade, aiming to profit from the high yields on the debt.

Dalton, co-founded by James Rosenwald and Steven D. Persky in 1998, aims to raise its assets under management after they fell 23 percent to about 100 billion yen this year amid the biggest financial market losses since the Great Depression. Global financial institutions have posted about $989 billion in writedowns and credit losses linked to the U.S. mortgage market collapse, pushing corporate bond yields higher.

“There is quite a big interest among Japanese institutional investors in distressed asset investments,” Sano, 53, said in an interview in Tokyo on Dec. 12. “The Lord giveth, and the Lord taketh away.” source

Resource #4: Dalton Strategic Partnership has liquidated its Melchior Japan Hedge Fund following a long period of underperformance.

Launched in 2003 and managed by FuNNeX, the same Tokyo group responsible for the troubled Melchior Japan Investment trust, the fund has hemorrhaged investors recently. Assets had fallen to around £20 million from a high of above £500 million in 2006, and the fund had lost 39.05% over the year to date versus a benchmark loss of just 4.7%, and following several years of double-digit losses.

Investors have been given the option of moving into DSP’s Melchior Japan 002 hedge fund, but many had lost their appetite for Japanese hedge fund investment after several years of underperformance, said DSP head of sales Richard Jones. Read more...

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Tags: Dalton Strategic Partnership, FuNNeX, Melchior Japan Investment trust, Richard Jones, Hedge Fund Shutdown, Asset Decline, Hedge Funds under-performance, under performance

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