Walewski backs Spain's beaten down banks
Avoiding the likes of Santander and BBVA, Citywire A-rated Nicolas Walewski goes deep value with bold Spanish financials bet.
by Atholl Simpson on Jan 08, 2013 at 15:02
European equity star Nicolas Walewski’s financials exposure has taken on a distinctly Latin flavour after he recently increased his weighting with the purchase of a number of domestic Spanish banks.
In his latest quarterly investor conference call on Tuesday, the founder of London-based group Alken AM, who recently regained his place among the rated elite with a Citywire A-rating, said:
‘We have increased our exposure to financials but have to remain prudent as we are still in an economy with low if not zero growth.’
His financials allocation currently accounts for 10% of his fund.
In recent months he has been increasingly vocal of his support for Europe's periphery, backing Ireland and Portugal in June for the strides they have made in tacking their debt and later increasing his Italian exposure through companies like motorway toll group Atlantia and financial services firm Mediolanum.
In the last two months his team has bought up domestic Spanish banks, avoiding the market’s big names such as Santander and BBVA, and Walewski said the big catalysts were the comments made by Mario Draghi and the OMT plans.
His colleague and financials analyst Antoine Badel said they were avoiding Spain’s largest banks due their high valuations and there was more upside to be found in some of if its domestically-focused banks - Banco Popular was among the main purchases the team made over Q4.
‘It is a big Spanish bank and is showing great efficiency in Spain. It is trading at 50% below book value and we bought it around the end of November.’
Walewski’s team believe that Spain could be reaching an inflection point and valuations of key domestic banks could be set to rise.
‘The macro outlook is improving and the restructuring of its labour market is underway and has more flexibility,’ said Badel.
‘The big budgetary efforts are behind us and we believe Spain is nearing the end of its austerity measures and it will soon start to reduce.’
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