Japanese hedge funds get a big boost from Abenomics

Singapore/Hong Kong

JAPANESE hedge funds are heading for record returns this year as investors bet that Prime Minister Shinzo Abe's policies will succeed in reviving the world's third-largest economy.

Stratton Street Capital LLP's warrant fund returned more than 300 per cent, while the Hayate Japan Equity Long-Short Fund almost doubled. The Eurekahedge Japan Hedge Fund Index, which tracks about 80 funds, returned 24 per cent in the 11 months through November, heading for the best year since the Singapore-based researcher began compiling data in 2000.

Japanese hedge funds swung from the world's worst performers in 2012 to the best as the central bank's reflation efforts put the benchmark Topix index on course for the biggest increase in 14 years and weakened the yen by 17 per cent versus the dollar. Assets at the…