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Warburg Pincus Feeling Heat from Japan's Internet Burnout

Firm's Japan funds suffer as their top stock picks crash.

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Showing the flip side of their risky strategies, Warburg Pincus' two Japan funds have recently suffered steep losses as Japanese Internet stocks have collapsed.

That's quite a contrast to 1999, when Warburg Pincus Japan Growth (WPJGX) and Warburg Pincus Japan Small Company (WPJPX) posted stunning gains of 266% and 329%, respectively. The funds benefited greatly from their devotion to Japan's three major Internet plays: Softbank (a part owner of Morningstar), Hikari Tsushin, and Sony (SNE). With Internet-crazed investors sending the prices of those stocks higher than Mount Fuji, the funds' returns soared.

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Gregg Wolper does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.