The city of Ashiya, Hyogo Prefecture, has been home to the nation's industrial titans since samurai ruled the land more than a century ago. Now it is a feeding ground for hedge funds tapping the wealth of new multimillionaires like Kunihisa Sagami.
Sagami, founder of mail-order cosmetics and jewelry supplier Epix, is one of the residents of the gated enclave overlooking the port city of Kobe who are among the highest taxpayers in Japan. They're the elite in a nation where households hold combined financial assets in excess of the annual gross domestic product of the U.S.
Overseas hedge funds like Winton Capital Management Ltd. and MKP Capital Management LLC are angling for that wealth to replenish capital after the credit crisis triggered the worst losses on record in their $1.6 trillion industry. And investors like Sagami are biting.