LANSDOWNE EUROPEAN SPECIAL SITUATIONS FUND: New man at helm – but prospects of profits remain high

To this point, so good, it is going solidly.’ That’s the verdict of Daniel Avigad on the returns he has generated for buyers from the funding fund he began managing 17 months in the past.

The fund in query is Lansdowne European Particular Conditions – earlier than Avigad got here on board it was often known as Crux European Particular Conditions and run by Richard Pease, a longstanding funding supervisor. 

And the return he has extracted from the fund’s portfolio to this point is a decent 19 per cent – higher than the common for the fund’s peer group.

Lansdowne Companions purchased funding boutique Crux Asset Administration in the summertime of 2023. And with Pease retiring, Avigad was the apparent option to take over the fund’s helm. For the previous ten years, he has run Lansdowne European Lengthy Solely Fund from the corporate’s London workplaces.

‘I am happy with the way in which issues are progressing with the fund,’ says Avigad. ‘There’s a momentum which I need to keep, and buyers appear comfortable.’

Though the fund’s emphasis on figuring out ‘idiosyncratic’ funding alternatives is similar method that Pease adopted, Avigad has stamped his personal mark on the portfolio. 

The variety of holdings has shrunk from 40 to 30, whereas 85 per cent of the portfolio is totally different to that he inherited. ‘Most of the shares now we have purchased are companies Richard favored, however had not invested in,’ he provides.

The fund, with belongings of £424 million, invests in companies throughout Europe together with the UK – though holdings in UK-listed corporations are restricted to 5 per cent. 

It has stakes in FTSE100-listed shares Compass and Informa. It additionally has a place in US-listed chemical firm Linde which was beforehand listed on the German inventory market.

Avigad is nothing however thorough in looking for out appropriate investments. He and his staff (two analysts and deputy fund supervisor Shashwat Verma) produce detailed monetary reviews on the businesses they maintain or are taken with, then talk about their findings with the administration of those companies. 

They then determine whether or not to proceed to carry, scale back or improve their stake, or purchase its shares.

Companies that Avigad likes embrace Swedish mining firm Boliden. ‘Europe accounts for 15 per cent of world demand for copper, but solely gives 5 per cent of world provide,’ he says. 

‘Boliden owns Aitik, Sweden’s largest open-pit copper mine, and may profit from the world’s drive in the direction of electrification. Typically, a few of the world’s largest untapped mineral deposits are to be present in Scandinavia.’ 

He is additionally a fan of Swedish telecoms firm Tele2 which he says must be a beneficiary from the consolidation of the telecoms trade Europe-wide.

Whereas the financial outlook for Europe is somewhat bleak, Avigad is satisfied his staff will proceed to seek out alternatives – whether or not because of international developments reminiscent of vitality transition or structural change inside particular industries.

Regardless of the nice efficiency numbers that Avigad has achieved to this point on European Particular Conditions, main investing platforms have but to incorporate it amongst their finest purchase European funds. 

But when he continues to outperform lots of his friends, the funding case for the fund will develop into stronger.

For instance, Interactive Investor prefers BlackRock Continental European Revenue, Constancy European, Janus Henderson European Choose Alternatives and index tracker Vanguard FTSE Developed Europe Ex-UK Fairness Index.

Whole fund costs are cheap at 0.89 per cent and Lansdowne Companions as an funding home at present manages belongings of round £6.5 billion.

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