Still, once a stockpicker, always a stockpicker.
With the revival in interest in Pan-European equities comes big decisions for stockpickers. Attractive valuations turn heads, but with such disparate economies involved, broad sector biases are a requisite in increasing your chances of delivering alpha and not being blown off-course by macro headwinds.
For Nicolas Walewski, founder of Alken Asset Management, and portfolio manager on its flagship €6.3bn (£4.5bn) European Opportunities and £2.3bn Absolute Return Europe funds, it was the 2008 global meltdown, not the subsequent eurozone crisis, that taught him the most valuable lessons.
“The year 2008 was a lesson in that just focusing on stock picks can be misleading and that, even in developed markets, you can have big swings in the macroeconomic cycle that have huge implications on the stock market,” he says.
“We are much more aware now of the economic macro and political situation and the big imbalances, and we are at least trying to be informed. Where is the credit cycle going? Are big currencies too cheap or too expensive? It is not just about individual companies.”
Paris match
Still, Walewski defines what he does as “very simple” – stockpicking with long-term conviction and low turnover (stock rotation is around a third). This originates, he explains, from his teenage experiences in Paris, watching his father invest.
“He taught me good long-term principles: don’t trade too much, have long-term conviction and buy good businesses. Only invest in what you know and understand, and in profitable businesses,” he says.
It is these lessons he has carried with him throughout his career, from his time running currency options at Credit Lyonnais in the early 1990s, and as manager of Banque Syz’ Oyster European Opportunities Fund later in the decade. He founded Alken in 2005, starting operations in January 2006.
