George Soros wins with Abe trade
I noted recently that hedge funds had hit upon what seems like a sure-fire winner: The so-called Abe trade, named for Shinzo Abe, Japan's PrimeMinister who is bent on lowering interest rates.
The essence of the trade is to short the yen to fund purchases of equities. Lots of the big-name funds have seized upon on this concept, including Caxton Associates, Moore Capital and Tudor Investment Corporation. Bloomberg reports that another big believer has emerged in George Soros, the iconic hedge fund manager of yesteryear who now manages his family office.
Soros "made almost $1 billion since November from bets that the yen would tumble, according to a person close to the billionaire's $24 billion family office. The Japanese wager helped the firm return about 10 percent last year and 5 percent so far this year, said the person, who asked not to be named because the firm is private. The yen has weakened 17 percent versus the dollar since about the start of the fourth quarter, the worst performance over a similar period since 1985," Bloomberg Businessweek noted.
Soros of course is famous for some if his historic currency bets. He's recalled fondly in the industry as the Man who Broke the Bank of England, a moniker that stems from this bet that the United Kingdom would have no choice but to devalue its currency. He made $1 billion from the wager---back in 1992.
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"Abe trade" winning converts