Gervais Williams, who oversees about 800 million pounds ($1.34 billion) at Gartmore Investment Management Ltd., said he’s buying shares in Irish banks and smaller technology companies as falling stock prices make them a bargain.
Gartmore has been adding shares in Bank of Ireland Plc and Allied Irish Banks Plc, the country’s two biggest lenders, and Irish Life & Permanent Plc, Ireland’s biggest mortgage provider, since the beginning of the year, Williams said.
The three lenders account for 96 percent of the Irish Financial Index, which fell 96 percent from a year earlier to a low on March 5. The index has since rallied almost sevenfold.
“The reason they’re attractive is because they’ve come down such a long way,” Gervais said in a telephone interview in London. “They’re still trading at only about 20 percent of their asset value.”
Ireland’s government wants to purge the country’s banks of toxic real-estate loans through the National Asset Management Agency, which will buy the loans at a discount to reflect the slump in property prices. The government published draft legislation for the plan on July 30 and will give details of the discount on Sept. 16.
“Suddenly the vicious cycle unwinds and it becomes a virtuous cycle as the banks get bigger and people who are underweight have to buy them,” the fund manager said.
Investor of the Year
Williams, 50, was named 2009 Investor of the Year by Growth Company Investor. The award goes to managers investing in companies listed under the FTSE 250. He manages the Gartmore Growth Opportunities Fund, the Gartmore Irish Growth Fund and Gartmore Fledgling Trust Plc.
About 16 percent of Williams’s investments are held in companies making computer hardware and 10 percent in software, which are the two largest industries in which he buys shares.
In the U.K., he invests in companies with market values of less than 1 billion pounds, and in Irish companies of any size. Across all funds, his team invests in “between 400 and 500” companies, he said.
Williams’s largest holdings are in Pace Plc, the U.K. supplier of television set-top boxes to British Sky Broadcasting Group Plc; Penna Consulting Plc, a U.K. human resources adviser to Barclays Plc; and BATM Advanced Communications Ltd., an Israeli network-equipment maker.
Since March, Williams added shares in Optos Plc, a Dunfermline, Scotland-based maker of scanners that detect eye diseases, and AssetCo Plc, a supplier of fire and rescue support services, which is based in South Ruislip, England.
Optos, which in May reported a first-half profit boosted by contract renewals, has “huge cash-generating potential,” Williams said. The company charges for renting out the machines. The stock has doubled from a record low in April.
“I think the new management team is doing all the right things, and on that basis, I’m rather hopeful we’re going to make a load of money,” he said.
AssetCo, which supplies the London fire brigade, benefits from longer contracts, Williams said. The stock has doubled since sinking to a low in April.
Williams has also added shares in Origin Enterprises Plc, the Dublin-based agribusiness and food company controlled by Aryzta AG since January.
“It’s recovered nicely,” he said. “Not as much as some of the others yet, but it will.”