MARKETING - The PRIDE Magazine by Liontrust - Flipbook - Page 22
F U N D MA N A G E R S ’ DI A RY
A WEEK IN THE WORLD OF
E U R O P E A N
I N C O M E
WITH
O L L Y
R U S S
AND
OISI N O ’ L EA RY
It’s an auspicious start to the week
as, having joined Liontrust a year ago
to single-handedly run the European
Income desk, I am today reunited with
my old colleague Oisín O’Leary –
who has joined my team as assistant
manager. After a year of arguing with
myself about the various merits or
demerits of a sector, stock or political
movement, it’s refreshing to have an
associate to bounce ideas around with –
not least thanks to his familiarity with my
investment process. Oisín spends much
of the day in a whirlwind tour comprising
compliance training, meeting the trading
desk and familiarising himself with our
house processes, while I take some
recent research notes and prepare for
the week’s meetings.
Monday
22 - THE P R I DE - Issue 1 Winter 2017
Earlier this year, I invested in Swiss
wiring firm Komax, whose management
are visiting London today to update me
on their technology. With the rise of incar entertainment, getting wiring done
effectively, accurately and efficiently
can be problematic for manufacturers
– especially when you factor in that
it’s traditionally done by hand. Komax
specialises in automating wiring for
vehicles, and they have brought a
big bag of cables with them as part
of their presentation. After bidding
them goodbye following a successful
meeting, I wonder to myself how they’ll
fare at Heathrow’s security on their
return journey…
Tuesday
2017 had the potential to be a
rollercoaster year for Europe, with
elections in the Netherlands, France and
Germany causing some concern at the
beginning of the year about the possible
outcomes and the performance of
populist parties. We were always fairly
confident of a market friendly outcome,
however, and are similarly sanguine
ahead of other upcoming European
events in 2017 and 2018. However,
having seen a reality TV star voted into to
the Oval Office in the US, and “Strong
and Stable” Theresa May’s miserable
election outcome in the UK, we can
never discount a shock result.
For us, it’s the forthcoming Italian election
which looks far more interesting. At the
time of writing, the populist, anti-euro
Five Star Movement are marginally
ahead in the polls – but that doesn’t
necessarily mean they’ll go on to win.
Looking at the Italian banking system can
tell us much about the current politics of
Europe. Last year, Germany apparently
prevented Italy from bailing out its
banks. This year, both Italy and Spain
have seen failing banks bailed out, or
otherwise dealt with.
I would suggest this might be the effect
of the new French President Emmanuel
Macron; his predecessor François
Hollande was seen as weak, and
Angela Merkel didn’t like him. Prior to
Hollande, Merkel and French Republican
Nicolas Sarkozy had a much closer
relationship, and the EU largely depends
on a successful Franco-German axis.
Macron has not long been in the job
– and his party didn’t exist a year ago –
but he’s now one of the most important
politicians in Europe – and, crucially, he
has banking experience.
We own Italian banking group Intesa
Sanpaolo within the Liontrust European
Income Fund so have spent much time
of late reviewing its deal to acquire
the ‘good assets’ of the two rescued
Venetian banks. The terms look extremely
favourable to Intesa, which, despite the
travails of the rest of the Italian banking
system, now approaches all-time highs.
Wednesday