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Thames flows back into UK equities

Thames River Capital has narrowed its underweight exposure to UK equities, predicting that foreign investors may look to snap up UK-domiciled global businesses at bargain prices.

Multi-manager co-head Gary Potter says the UK economy continues to look bleak but sterling’s collapse against the euro, yen and dollar means it looks relatively attractive for American or European buyers looking to strike deals on the cheap, providing they can find the financing.

With this in mind, the firm has increased its exposure to the UK across its global portfolios from 9-10 per cent last year to 13-14 per cent.

Potter says: “The UK has got its fair share of blue-chip international businesses with a global reach and these can be acquired 30 per cent odd cheaper than they were on a relative basis because of the currency.”

Potter and co-head Robert Burdett have added carefully to their US exposure and trimmed back on Japan and Europe progressively. Potter says: “We had tremendous currency strength from the yen last year and that has petered out. We peaked at 14 per cent last year and we are about half that now.”

Thames River recently broke through the £100m barrier since launching its fund of funds range in October 2007 and enjoyed record month start to date inflows this month.

Potter says: “We remain strategically cautious but tactically vigilant as there will be plenty of opportunities to make money as well as lose it in 2009.”

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