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To: KonKilo who wrote (10348)	1/24/2003 12:27:01 AM
From: Bucky Katt	Read Replies (1) \| Respond to of 48463

Eifuku Master Fund Collapses in 7 Days As Bets With Borrowed Money Turn Sour HEARD ON THE STREET from The Wall Street Journal. Even by hedge-fund standards, this was a spectacularly rapid demise. A $300 million hedge fund in Japan is being wound down after losing virtually all its capital in just seven trading days in early January -- the latest illustration of the perils of such secretive and increasingly popular investment partnerships. Eifuku Master Fund, run by a former Lehman Brothers Tokyo-based trader, took huge bets with borrowed money on a limited number of trades that went wrong. Investors in the fund, now facing a loss of their money, may include many wealthy individuals in the U.S., according to hedge-fund managers in both Tokyo and New York. "Substantial trading losses have consumed nearly all the fund's capital," John Koonmen, the manager, wrote in a letter to investors, dated Jan. 15. The letter details a nerve-racking, rapid downward spiral for the fund, whose Japanese name can be translated as "good fortune" or "prosperity." The swift reversal in the fund, which was up 76% in 2002, shows just how volatile hedge funds can be. Hedge funds -- lightly regulated and generally available only to institutions and the wealthy -- sometimes need to take uncommon risks as they try to make money in sluggish markets. Currently, there is heightened scrutiny of the activities of these funds, which manage $600 billion. What is unusual about Eifuku is the speed of the fund's demise, which was accentuated by the heavy use of leverage, or borrowed funds. Securities-brokerage-firm executives in Tokyo say Mr. Koonmen was the biggest producer of trading commissions in Japan, as he used borrowed money to wager far beyond the $300 million in his fund. While the fund's actual capital was down to almost nothing as of the Jan. 15 letter, Eifuku still had long positions valued at $80 million and short positions at $117 million, according to the letter. At the beginning of this week, rumors of the fund's demise preyed on market sentiment in Japan. Read more here>http://online.wsj.com/article/0,,heard_on_the_street,00.html