European funds target UK offering new investment opportunities
Published: 14:30 Monday 14 January 2008 By: Danielle Levy, European Funds Reporter
With an increasing number of European asset managers targeting the UK market, investors are set to gain access to a growing number of specialist funds from continental providers.
Citywire's European Specialist Summit in London in December highlighted five new offerings, with the managers of these funds addressing an audience of UK-based wealth managers and multi-managers.
The DWS Invest Global Agribusiness fund, managed by Dr. Oliver Kratz, provides one such example of a fund which is to be replicated for the UK market this year. Launched a year ago, the fund seeks to benefit from rising food prices.
DWS product specialist Ralf A. Levermann points to strong population growth, urbanisation and rising income in Asia as factors which have created an increase in demand for high protein food and added to the growing problem of limited resources.
‘This is a mega-trend in our view. When you look at what is happening in the world it’s all about milk and butter prices rising by 50%. The wheat price is up 100%, corn by 50%, soy by 70%, even coffee is on a 10-year high. This is the awakening of agflation, inflation for agricultural products.
‘Agflation is a hot topic in the world. In our view the era of low prices for agricultural products is over,’ Levermann says.
Kratz invests in four key areas: fertiliser, aquaculture, ports and infrastructure. The fund’s largest holding at 4.4% is leading agribusiness company Monsanto.
Alexandra Morris, manager of the 50-stock Odin Europa fund, forms part of Nordic boutique Odin Asset Management’s top-performing team. Currently A-rated in Sweden, Oslo-based Morris is a bottom-up stockpicker who looks for out of favour, unfashionable stocks.
‘We try to avoid investing in stocks that are overvalued, not only because the time it takes to create value is longer but also because the consequences of bad news or a bad quarter are much more detrimental.
Eastern Europe, however, is one area where Morris does not see value at present.
‘I think it’s overcrowded and overpriced, and I am honestly afraid of corporate governance in these quite immature markets. However, I am aware of the growth in eastern Europe and I am taking advantage of this through companies that are based in western Europe but have exposure to eastern Europe,' she says.
Morris is based in Oslo, not known as one of the world’s major financial centres, but she believes this can be an advantage as it insulates her from the market noise that can distract fund managers.
‘There is so much noise out there. There are bears and bulls everywhere you go. So, I think one of the key characteristics for a fund manager is to ignore the noise,’ she says.
