Odey Asset shuts Japan hedge fund

London’s Odey Asset Management has shut its Japan hedge fund after poor performance and investor withdrawals saw it plummet from a peak of $1.2bn (£608m) to less than $40m of assets in just two years.

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Many Japanese hedge funds have been struggling over the past two years, with investors responding by reducing exposure to the entire sector.

But Odey’s Japan & General performance was particularly bad, thanks to a bet that Japanese banks would profit from rising inflation. This pushed the fund to a big loss as financial shares were hurt by infection fears after the credit crunch.