11/06/2012
Growth shares should be sought in euro zone
In an environment in which “not everything is necessarily negative in the euro zone, although uncertainty remains high, it may not be incongruous to seek growth shares in the euro zone,” Nicolas Walewski, founder and fund manager at Alken, claimed recently on a visit to Paris. Walewski cites the Italian banking sector. “The question is how to play the reduction in risk premiums. For Italy, it is largely the perception of risk which poses a problem. If this perception of risk decreases, the cost of the risk will be re-evaluated. From my point of view, the structural problems are not insurmountable. Unlike what we may observe elsewhere in Europe, the Italian banking sector is still excessively fragmented, which results in highly mediocre profitability. Some mid-sized banks are not even earning commissions. Many mid-sized banks are earning profits of 5% to 6%. They are getting 0.3 times owners’ equity,” he explained. This situation persists, although BNP Paribas made an “excellent deal” with its acquisition of BNL. But, with the crisis, “for six months there have been changes to the scenarios. Private equity funds in particular have identified enormous potential gains in productivity. Exposure to the Italian banking sector is thus highly attractive,” he concludes. Assets under management at Alken as of the end of April totalled EUR3bn, virtually unchanged compared with the end of December 2011. “Flows have been positive since the beginning of this year, and we are not seeing any redemptions either, but for all of our funds overall, net inflows are highly limited. This stability in asset levels has at least one advantage: it facilitates our management,” says Isabel Ortega, partner and director of sales at Alken.
