Lord Rothschild fund reaps big windfall on Japanese stock bet

 
Michael Bow
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LORD Jacob Rothschild, a scion of banking’s most famous family, yesterday said his company had doubled its investment in Japanese stocks after the country changed its monetary policy, helping the value of its fund to surge.

Rothschild, a sixth generation descendant of Mayer Amschel Rothschild, revealed his fund outfit RIT Capital Partners had upped its investment in the Nikkei – by some £90m – due to what he dubbed the country’s “Keynesian experiment”.

He said: “We felt that the impact of reflationary policies against an undervalued stock market provided us with an exceptional investment opportunity,”

RIT, which is based in London’s opulent eighteenth century Spencer House, said its fund value hit a record high on 22 February, increasing from 1,191p a share at the end of the year to 1,309p.

The increase was driven by a tactical switch in September to increase equity exposure from 51 per cent of the portfolio to 61 per cent and also reduce the fund’s hedging strategies. Investment in Japanese stocks increased to eight per cent of the fund in the nine months to December 2012, rising from £57m to £147m. The move was “well timed”, the company said. The Nikkei has increased almost 25 per cent over the last three months since the appointment of Prime Minister Shinzo Abe.