Tiger fund tamed by yen
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October 8, 1998: 6:02 p.m. ET
Gains in Japanese economy results in 10-percent hit for major hedge fund
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NEW YORK (CNNfn) - Hedge fund Tiger Management suffered substantial losses this week as a result of volatility in the Japanese market, sources familiar with Tiger's fund said Thursday.
Tiger, one of the most respected hedge funds with close to $20 billion in assets, lost nearly 10 percent of its value Wednesday when the dollar fell dramatically against the Japanese yen, a Tiger investor told CNNfn.
That's on top of a similar hit last month when bets against Japan were reportedly hurt by sharp gains in the yen and Japanese stocks.
However, unlike rival hedge fund Long Term Capital Management, which ran into trouble last month because its bets were highly leveraged, Tiger is not believed to be excessively leveraged and not suffering from liquidity limitations, the source said.
The investor also pointed out that Tiger Management reassured him the fund is still up about 8 percent on the year.
Word that Tiger Management was caught betting the U.S. dollar would rise and had to buy up a yen position to cover that bet contributed to the yen rally over the last two days.
On Wednesday, the dollar plunged to a 12-month low against the yen, sending panic through the world's currency markets. On Thursday, the dollar continued to slide, trading at 119.36 yen.
Tiger officials declined comment.
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