TOKYO (HedgeWorld.com)–FX Concepts has forged a strategic alliance with the equity-focused boutique RS Asset Management, which will serve as the exclusive distribution agent for the New York-based firm’s currency overlay programs in Japan.
“I think the deal is important because it comes at a time when more Japanese institutional investors like pension funds, insurance companies and banks are putting more money overseas, and these investments are typically not denominated in yen. That means currency exposure is a big issue,” said FX Concepts principal John Taylor.
And currency overlays on investments, especially ones that are flat or down, helps keep investors’ portfolios in the black, according to Mr. Taylor. The typical FX Concepts currency overlay seeks to add 300 basis points a year to a portfolio a year, he said.
What’s more, the recent weakening of the U.S. dollar and the strengthening of the euro has caught the attention of investors in Japan, a country whose economy has been stuck in a six-year recession that has displaced a sizable amount of investor capital to offshore equity markets.