Hugh Hendry: “Want to make real money? Make it in Japan”

“…But it is our contention that Japan’s long spell in the sin bin has left its society particularly vulnerable to the charms of a radicalization of monetary policy. We reckon that with the pro-growth shocks of neo-mercantilism essentially having run their course, Japan will struggle to produce the incremental GDP necessary to service and repay its gigantic sovereign debt load. This will provoke inflationary price targeting by a politicized central bank that should send Japanese stock prices heavenwards once more.” – Hugh Hendry in his Eclectica Fund December 2013 Letter to investors.

That’s an intriguing comment from renowned hedge fund manager Hugh Hendry, who in his own words, says he is no longer the “last bear standing.”

Well, at least one Japan-oriented hedge fund has posted returns north of heaven during 2013 according to HSBC’s Hedge Weekly #49 Investment Funds Performance Review, issued by HSBC Alternative Investment Group for the week ended December 6, 2013.

SFP Value Realization fund a winner already

The SFP Value Realization Fund has returned a stellar 72.67% during 2013 up to November 29, 2013. The fund, co-founded and managed by David Baran, a former Goldman Sachs trader, invests primarily in Japanese companies with a value orientation, according to a Bloomberg article. “We seek situations where we can work closely with management to cause that huge gap between where the shares are traded and what the whole enterprise is worth to close,” Baran says. “From the beginning, we have held that the Japanese equity market is highly inefficient — nowhere else in the world do price and value diverge like in Japan.”