Rothschild in gold
By Emiliya Mychasuk and Emiko Terazono
Published: June 17 2010 03:00 | Last updated: June 17 2010 03:00
Lord Rothschild has returned to equity markets for higher rates of return, through his RIT Capital investment vehicle.
But RIT is hedging its bets by holding a stash of gold and remains conservative in its investment choices.
"We face . . . an outlook and an uncertainty unlike much that we have been used to," the 74-year-old investor warns in the latest RIT report.
In a search for returns, RIT lifted public markets exposure to a peak of 82 per cent, from 37 per cent a year ago. It bought commodities and more cyclical companies, as well as developing markets and currencies. Ahead of the May markets slump, it favoured cash-rich companies with a global spread. Currency plays helped significantly, as RIT cut back on sterling and euros and lifted dollar and dollar-pegged Asian currencies.
But Lord Rothschild kept "significant" stores of gold and gold shares "for defensive reasons" - gold made up 9 per cent of net assets by this June.
As for specific stocks, RIT was caught with a £28m stake in Transocean, operator of the ill-fated BP oil rig. It was a one-time investor in BSkyB but sold in 2009, soon after Lord Rothschild left the board he had joined to smooth the way for James Murdoch.