Japanese pension funds may shun smaller hedge funds in favor of larger ones after the suspension of AIJ Investment Advisors Co. by the nation's regulator for possibly losing clients' money, according to GFIA Pte.
AIJ was suspended on Feb. 24 by Japan's financial regulator after it couldn't account for all of the 185.3 billion yen ($2.3 billion) it managed for clients as of March 2011. Japanese pensions including those representing unions were among clients that had money with AIJ, which hasn't been accused of wrongdoing. The suspension of AIJ that sparked the biggest investigation in the history of Japan's fund industry resembles the impact on the hedge fund industry after executives at Internet provider Livedoor Co. were arrested in 2006 for fabricating profits, according to a client report by GFIA, which advises investors seeking to allocate money to hedge funds. (Bloomberg)
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