Little more than a year after losing its high-profile proxy battle with Japan's largest electric utility, The Children's Investment Fund Management is getting out of Asia entirely.
The Japanese government pulled out all the stops to keep the activist hedge fund from getting its hands on a bigger chunk of Electric Power Development Co., better known as J-Power. But it could hardly imagine that its stand against the "national security threat" presented by TCI would drive the hedge fund off the continent entirely.
Its Japanese defeat--which cost TCI $130 million--was followed earlier this year by the departure of John Ho, the hedge fund's top executive in Asia and the pointman for its J-Power bid. Last month, TCI closed its Hong Kong office, and the London firm has sold off most of its investments in Asia and has approached other hedge funds in the region about buying what's left of its portfolios there.
TCI's certainly not the only activist hedge fund to find itself unwelcome in Japan, and it's decision to quit Asia is the latest in a long string of western hedge fund firms retrenching in the region or eliminating their presence there entirely.
Emphasis on latest: With investors beginning to return to hedge funds this year, some in the industry are looking to pick up in Asia where the old guys left off. It's been a rough year for TCI, which plummeted 40% last year and was down this year through August. The firm's assets under management have fallen by half and it has lost three top executives, including all of its remaining founding partners save top man Chris Hohn.
You can't help but suspect that this move has less to do with the Japanese and more to do with TCI.
Activist hedge fund TCI closes down in Asia [Reuters]
TCI's Asia Chief Resigns; Third Major Departure This Year [FINalternatives]
TCI Sells J-Power Stake [FINalternatives]
TCI Lambastes Japanese Government Decision [FINalternatives]