Marcal also oversees the manager’s Pacific Rim Fund, which invests in some Australian stocks, which like a lot of emerging markets had been part of the cheap credit bubble which preceded the crisis. It sold out of Macquarie Bank, for instance, after it had been a big beneficiary of the bubble.

Marcal said the manager had reduced the emerging markets exposure in the Pacific Rim Fund from about 40 per cent to 2 per cent.

“We have believed since the middle of last year that the economy would slow and that’s the way we positioned our portfolio,” he said. “We invest in companies which benefit from change. In the US we shorted the home builders and then the companies that guaranteed them and then the investment banks who lent them their CDOs… There’s always change taking place and there’s always unintended consequences of policies.”

Nicholas Applegate this year opened a sales office in Sydney, run by John Hamer, an experienced marketer. It retains its client service office in Melbourne, under client service manager Melanie Douglas.

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