Star Tracker: revisiting emerging Europe’s consistency kings

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Back in October 2009 Citywire Global analysis pinpointed Barings’ Ghadir Abu Leil Cooper, Banca del Gottardo’s Andrea Solari and Thomas Farthofer of Griffin Investment Management as the leading lights in emerging European equities.

The three managers emerged as the elite few from a class of 29 fund managers with a five-year track record to have returned more than the average manager in each of the five years between 2004 and 2009.

Nearly three years on and with the asset class now boasting 66 managers with a five-year track record, a host of changes have not only occurred in this sector but also with the fund managers previously showcased.

Ghadir Abu Leil-Cooper

Fund: Baring Eastern Europe

Performance since analysis (November 2009-October 2012): -3.9%

Benchmark: 11.6% (MSCI EM Europe 10-40 TR USD)

Ghadir Abu Leil-Cooper is the only manager still at the helm of the fund since the original analysis. Cooper has been lead manager on the $2 billion Baring Eastern Europe fund for over 8 years.

However, her performance has fallen in the 35 months since the previous analysis. Between November 2009 and the end of October 2012, Cooper lost 3.9% in US dollar terms. This is while her benchmark, the MSCI EM Europe 10-40 TR USD, rose 11.6%.

According to the most recent factsheet, the spreading of recessionary sentiment in the eurozone has impaired investments in the Czech Republic and Hungary, although Russia, Turkey and Poland remain in good health.

Her biggest country allocation at present is towards Russia (63%), while energy (35%) and financials (30%) account for the largest proportion of her fund’s sector exposure.

Andrea Solari

Fund: OSTAVLOR

Performance since analysis (November 2009-October 2012): -4.4%

Benchmark: 9.2% (MSCI EM Europe TR USD)

Following the previous round of analysis, Andrea Solari only ran BSI Bank’s OSTAVLOR fund for a further 13 months before handing over the reins to Michele Malingamba in January 2011.

Under the combined stewardship of Solari and Malingamba, the OSTVALOR fund has lost 0.5% more than the Barings fund. This is while its Citywire benchmark, the MSCI EM Europe TR USD, rose 9.2%.

At present, the fund has over 60% invested in Serbian stocks, with energy (38%) and finance (20%) also forming the two largest sector bets.

Thomas Farthofer

Fund: Griffin/Renaissance Eastern European

Performance since analysis (November 2009-October 2012): -11.3%

Benchmark: 9.2% (MSCI EM Europe TR USD)

Rounding out our catch-up analysis is another fund manager no longer in the hot seat. Thomas Farthofer stepped down from the Griffin Eastern European fund and opted to depart in March 2012.

This coincided with Griffin selling off a number of its funds to emerging Europe investment rival Renaissance Asset Management.

The formerly Citywire AAA-rated manager was replaced by RAM CIO Plamen Monovski on the €212 million fund, which was subsequently renamed the Renaissance Eastern European fund.