He says: “There were a number of investors who were ready to support me if I started my own firm, and I wanted to set up my own team in an independent boutique because, for what we do, I think that is the right business model.
“I believe in being entirely focused on what we do.”
Energy efficiency
On a basic level, the team’s current convictions on a sector level are an overweight to consumer discretionary and underweighting to energy. Walewski sold out of Brent oil in the middle of last year having held a view for some time that there was no catalyst for it to trade at these heights.
“We sold out at between $100 (£64) and $110 per barrel and kept on selling, then it fell later in the year to $50,” he explains.
“It may have rallied since but, for us, it’s just a bear market rally and it will fade. Mid to long term, we see the price of oil struggling to move up. It may be volatile with mini cycles but it is either going to be stable or trending lower.
“We have discovered a lot of oil in the US and there are new techniques to drill that are getting cheaper by the day. There is this belief right now of the people that are buying oil that the break-even is higher, at $70-$80 per barrel, but that the price of oil was low enough recently to reduce production. But we think the market is too optimistic.”
On the flipside, a preference for consumer discretionary makes sense, with long-term lower energy prices meaning more disposable income in people’s pockets to spend elsewhere. One way Alken is playing this is through car manufacturers, such as Peugeot, which is still seeing strong demand in Western Europe.
Flying high
Another high-conviction holding is Ryanair, which has a business model that enthuses Walewski greatly.
“My experience tends to be that often the best opportunities are companies with a structural competitive advantage in a commodity industry, and that’s exactly the case with Ryanair,” he says.
