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John Ventre: the EM fund I'm backing
by Robert St George on Feb 05, 2014 at 14:18
John Ventre, head of multi-manager at Old Mutual, has initiated a position in an emerging-markets fund despite widespread flight from the region.
Through his Spectrum funds, which together hold more than £2 billion, Ventre has invested in the EIS Strategic Emerging Europe fund.
This is run by Citywire + rated Michel Danechi of Armajaro Asset Management, and is essentially the long book of the firm’s equivalent hedge-fund strategy.
‘The consequence of him being from a hedge-fund background is he’s quite pragmatic, with a strong sense of top-down risk management,’ said Ventre (pictured).
According to Citywire data the fund is the tenth best in its 157-strong sector over the past three years, returning 1% compared with a peer-group average loss of 15.2%.
Ventre explained that the present attraction was based both on low valuations and Danechi’s approach.
‘This is partly to take advantage of a value opportunity we see there, but also to take advantage of what we think is an interesting manager pick,’ he commented.
‘Within that is very much a value-driven special situations type of stock selection, which we think really suits the environment we’re in today, where babies are being thrown out with the bathwater in emerging markets.
Specifically there is a huge divergence in emerging markets between what you might call quality – the best company in the region – and the best investment in a region, which is cheaper.’
As an example, Ventre highlighted Russian retailers Magnit and X5. Magnit is a high-quality firm, he acknowledged, and it is consequently very well owned by emerging-market funds.
In contrast, Ventre recognised that X5 - one of Danechi’s top-ten holdings - was a much lower-quality business but described it as ‘stupidly cheap’.
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by Himanshu Singh on Apr 19, 2014 at 05:21