Mandarine Gestion’s Marc Renaud, whose Paris-based equity fund lost almost twice as much as the wider market last year because of investments in banks, is sticking to his strategy and expects lenders from BNP Paribas (BNP) SA to Intesa Sanpaolo SpA (ISP) to be “winners” in 2012.
Renaud’s Mandarine Valeur fund fell 19 percent in 2011, compared with an 11 percent drop for the benchmark Stoxx Europe 600 Index. He still has more than 20 percent of resources invested in banking shares, compared with the 8 percent suggested by industry weightings in the Stoxx 600, in a bet that the euro-area debt crisis won’t spread to Italy or France.
“I underestimated Europe’s debt crisis when I overweighted banks in my portfolio last year,” Renaud, who manages about 850 million euros ($1.1 billion) in shares, said in an interview in Frankfurt last week. “I think there is a lot of profit to be made with banks this year. France and Italy are solvent and banks such as BNP and Intesa will emerge from the crisis as winners.”
Banks across the region have risen 11 percent this year as the European Central Bank awarded euro-area lenders a record amount in three-year loans to keep credit flowing to the economy. That gives the industry the fourth-best performance among 19 groups in the Stoxx 600, after automakers, mining companies and insurers.
Banking shares were the worst performers in the Stoxx 600 last year as Europe’s debt crisis increased the risk of government defaults and stress tests showed the region’s lenders need to boost their capital levels. BNP Paribas, France’s biggest bank, has recovered 54 percent from last year’s low on Sept. 22 and Italy’s Intesa Sanpaolo has rebounded 67 percent since Sept. 12.
“I am a bit more cautious on cyclical industrials,” Renaud said, referring to sectors who are most reliant of economic growth to boost revenue. “It is going to be difficult for stocks like Siemens or Schneider.”
Siemens AG (SIE), Europe’s biggest engineering company, has slipped 0.6 percent in 2012, while Schneider Electric SA (SU), the world’s largest maker of low- and medium-voltage equipment, has gained 19 percent.
Renaud said he’s “overweight” cement makers because they became too cheap, while he’s “underweight’ telecommunication shares.
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