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Jupiter’s Guy de Blonay: How I am playing banks’ great restructuring
by Elsa Buchanan on Sep 17, 2013 at 07:03
Jupiter Financial Opportunities manager Guy de Blonay is favouring ‘self-help’ banks that are restructuring through the sale of non-core assets and has slashed his exposure to emerging markets on the back of concerns about the tapering of quantitative easing (QE).
De Blonay targets three main themes in his fund: growth, special situations and stocks yielding over 5%. He said, having exited his cash position last year, special situations is the dominant theme in the current climate.
‘After adding to our positions in 2012, we are now fully invested because we didn’t want to fight central banks,’ he said.
‘The interference of the central banks in the free financial markets can be very costly for investors that want to fight it. It is too consistent and strong to be ignored.’
‘Because of the low interest rate environment and all of the restructuring going on in the sector, special situations are our biggest theme and is where 50% of the portfolio resides.’
Within the special situations segment, de Blonay is ideally looking for companies that are trading between 0.5 and one times book value, with the potential to go up to three times book.
He points to Swedbank as a ‘success story’ after the bank was rerated from 0.5 to 1.3 times book. It now offers a return on equity (RoE) of 16%, a payout ratio of 75% and has a dividend yield of over 7%. It was rerated after the bank went through right issues and a change in management.
‘All the efforts put into profitability rather than revenue growth are paying out,’ he explained.
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- Swedbank AB
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