Hedge Funds Japan Exposure

Hedge Funds Looking to Reduce Risk Exposure in Japan

Until the tsunami brought still untold destruction to Japan, hedge funds had been steadily boosting their presence in the country. Now, in the wake of the disaster, hedge funds are seeking to limit their exposure, rather than looking to make big gains off the instability.

"Most hedge funds have been very much keeping a low trading exposure around Japan," said Randall Dillard, chief investment officer and co-founder of fund of hedge funds firm Liongate.

"You'd think in a market like this that they would be extremely aggressive but the reality, from a gauge of our managers, is that they've minimised trading exposure. Their primary concern is if there's worse severity in the nuclear situation."

Japanese stocks have been extremely volatile this week in the wake of the natural disaster. The Nikkei 225 .N225 plunged 6.2 percent on Monday and 10.6 percent on Tuesday, before rebounding on Wednesday then falling again on Thursday. Source

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