Preparation is paramount in volatile times, says DJE Kapital’s Jens Ehrhardt

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Jens Ehrhardt, one of Germany’s most experienced independent asset managers says his 40-plus years in markets helps in times of crisis.

‘Be prepared’ is one of the golden principles behind the global scout movement, founded by Robert Baden-Powell.

For Jens Ehrhardt (pictured), officer and secretary of the World Scout Foundation, being prepared for various market and economic conditions has no doubt been useful in his professional life, as one of Germany’s most experienced asset managers.
He founded Dr Jens Ehrhardt group in Munich in 1974, as Germany’s first stand-alone asset manager. He since grew DJE Kapital AG to about 100 staff and €10bn total assets.

Ehrhardt personally manages €2bn of this in inhouse and third-party mandates, various regions, asset classes, and both funds and funds of funds. His third-party duties include for Patriarch Multi-Manager and on Gamax Maxi-Fonds Asian International equities fund.

These must be among the most difficult times to ‘be prepared’, as markets react to unexpected outcomes of binary political events, or perceived political paralysis. Ehrhardt is alert, and prepared.

“When binary outcomes are possible, you have to be very flexible, not just fully invested all the time. I have been in this business for more than 40 years, but now it is difficult because everything is so dependent on so many political decisions, and you do not know what they are going to do,” he says.

Cash holdings

“Before key decisions, it is probably good to hold more in cash, which could of course be proved wrong. But if you respond very quickly in bullish cases, for example, using futures, you can be 100% long again in portfolios in just a few minutes, whereas if things worsen, it is good to be partly in cash. That flexibility is one reason our funds have low volatility, and it helps performance on the downside and upside, by responding very quickly.”

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