Giant European fund firm Carmignac plans UK assault

One of the biggest names on the continent, Edouard Carmignac, has revealed his main target for 2011 is the UK market.

The UK is one of the few European countries Carmignac's eponymous firm has yet to establish itself. He said it plans to launch a London office on the expectation that his funds could be well-received by UK investors.

'We feel mature enough now to move into the UK market,' Carmignac said. 'There is an equity-focused investment culture there, which we feel comfortuable with. We are bullish on equities and it is precisely the right time to move into the UK market, we think.'

Carmignac runs Europe's largest fund, the €23 billion Patrimoine fund. Since founding his Paris-based firm in 1989, it has become one of the largest independent investment groups in Europe with almost €55 billion of assets under management. It saw assets rise from €33 billion at the end of 2009 thanks to a combination of strong performance and €16 billion of new money.  

In an interview with Citywire Global online editor Phil Haddon, Carmignac said he thinks the energy sector is one of the most promising areas to invest in for 2011, while he has been reducing his gold exposure and has short term concerns over the impact of inflation in emerging markets.

Speaking at Carmignac Gestion’s quarterly investor conference in Paris, Frederic Leroux and company founder Carmignac laid out the firm’s macro views for the year ahead.

They think the US is turning around. ‘We’ve had confirmation of a cyclical rebound, thanks to QE2 and its positive effects,’ said Leroux, co-manager on the Carmignac Patrimoine fund. ‘We are seeing some leading indicators looking really good. Bernanke has done a good job.’

The firm is encouraged by improvements in corporate lending in the country, while it thinks smaller companies there are now looking far healthier.

‘There is still great potential for upside in the US,’ said Leroux, although he warned that structural impediments remain, such as high unemployment, the poor state of the property market, and concerns over US government debt.

They think there is a slight short term risk to markets caused by possible interest rate moves, ‘but the next months or quarters should not be negative for markets.’