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Japan: The multi-manager reaction

As the events in Japan continue to escalate, multi-managers in UK have spoken about their future plans regarding exposure levels.

Gary Potter, the co-head of the multi-manager team at Thames River, confirmed there is still exposure in a number of funds and that Japan possesses “a resilient economy that will recover”.

The Thames River global boutiques fund has the largest exposure to Japan at 9.5 per cent of its assets under management.

Potter says there were plans to buy into the market yesterday but the decision was made to “hang off and let the dust settle”, although some money was placed for a midday evaluation.

Although Potter remains optimistic about Japan, particularly the opportunities that present themselves as the market becomes rapidly cheaper, the plan is to proceed with caution.

As recently as February, Elliot Farley, the manager of the T Bailey defensive cautious managed and the dynamic cautious managed funds, was overweight to Japan by 7.5 per cent.

Farley said the move to make Japanese equities the primary position within the portfolio was based on a plan to hedge against the Yen.

Farley was unwilling to comment on the recent events in Japan as it is still too early to assess the situation completely.

Tom Becket, the chief investment officer for Psigma, explain many of the Japanese export companies, where his fund’s exposure is focused, have been sold off aggressively. This is because the companies have had to stop production owing to power-related issues and safety concerns.

Japan is currently under pressure to contain potential radiation leaks from the severely damaged Fukushima Daiichi nuclear plant. Particularly, Tokyo is suffering from rolling blackouts.

Becket strongly believes that, in the medium term, patience with Japanese equities will be rewarded and that the plan is to monitor events very careful over the coming weeks.


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