Long/short equity manager Hughes Beuzelin has put his money where Mario Draghi’s mouth is and upped exposure to Spanish and Italian names in his long book.
The Citywire Alternative Ucits A-rated manager, who runs the €126 million BDL Rempart Europe fund, said he has opened a new long position in Spanish utilities firm Iberdrola, while upping his exposure to Italian firm SNAM.
‘It made sense to hold some exposure before the ECB announcement and so we had a decent position in SNAM and when the ECB moved in, we thought the euro might stay for a little longer and so went in a lot more. Now those guys represent five or six per cent.’
Beuzelin – who was included in recent Citywire Global analysis into the most improved Alternative Ucits managers – said Mario Draghi’s strong words on the future of the euro had swayed him to be more aggressive here.
‘Clearly we got involved in Iberdrola following the ECB announcement that they would not let the euro down whatever the cost would be. Otherwise, we were worried like everybody else that we would perhaps end up with pesetas.’
Despite the ECB support, Beuzelin said he is mindful of getting carried away and said he has only looked to act now due to the strong support being shown by the ECB.
‘At one point when Spain was in trouble we looked at things because the market was down but we couldn’t find any businesses we liked.’
‘Whereas in Germany we could find lots of businesses we liked, so really it shows how much trouble those countries are in because there simply aren’t that many good businesses.’
In his portfolio as a whole, Beuzelin’s major bets are in consumer staples (13%), utilities (12%) and telecommunications (11%). This is while having his largest allocation by region to Germany (16%).
The BDL Rempart Europe fund has returned 18.26% over the past three years. This compares to the average long/short equity manager tracked by Citywire, who has returned 15.55% and the Stoxx Europe 50 CR EUR benchmark, which has risen 4.47% over the same period.