Japanese regulators looking into the causes of the collapse of the Eifuku hedge fund in Japan, closed at the end of January after being forced into a fire sale of its $300 million portfolio, are thought to be focusing on excessive leverage.
Earlier reports indicated that the Eifuku Master Fund, run by former Lehman Brothers trader John Koonmen in Tokyo, had taken large leveraged bets on three trades. The largest, worth $1 billion, is thought to have consisted of a short position in NTT DoCoMo Inc. and a long position in its parent, Nippon Telegraph & Telephone Corp. The second is said to have involved Sega Corporation, and a third Japanese bank shares.
A later report in the Wall Street Journal suggested that George Soros had $180 million invested in the Eifuku fund.