Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Russia Assets ‘Sexy Growth’ Helps Skagen Navigate Political Risk

Russia still offers attractive buying opportunities, according to Skagen AS, a Norway-based investor that’s delivered better returns over the past decade than funds run by some of Wall Street’s biggest money managers.

Though “the political pressure is increasing,” Russia’s “spotty governance records are countered by juicy yields and very sexy growth situations at low pricing,” Kristoffer Stensrud, founder of Stavanger-based Skagen, said in an e-mailed response to questions.

Norway, which isn’t a member of the European Union, said last week it will probably abide by EU and U.S. sanctions against Russia. President Vladimir Putin’s continued support for separatists in eastern Ukraine has prompted Europe and the U.S. to impose restrictions on the operations of some banks and energy companies in an effort to isolate the Russian economy.

“Our guess for a more politicized market unfortunately came true, but for now we are looking more at possibilities,” Stensrud said in the Aug. 4 e-mail.

Since his January call to ignore the advice of much of Wall Street and continue buying emerging market assets, the MSCI Emerging Markets Index has gained 8.7 percent.

The 60-year-old investor oversees Skagen’s 55 billion-krone ($8.8 billion) Kon-Tiki A emerging market fund, which has returned an annualized 16 percent over the past 10 years. That’s the ninth-best performance among 1,822 global equity funds tracked by Bloomberg. It delivered 15 percent over the past 12 months, measured in dollars, compared with a 14 percent return for the benchmark MSCI Emerging Markets index, according to Skagen. Its biggest holdings are Hyundai Motor Co. and Samsung Electronics Co. Ltd.

Price Gains

Kon-Tiki A had 6.9 percent of its funds in Russian stocks as of June 30, the third-largest country allocation after South Korea and India, according to the Skagen website. It held a 1.87 billion krone-stake in AFK Sistema and owned 505.8 million kroner of OAO Gazprom shares at the end of the first half.

Though Russia’s benchmark Micex index has lost 11 percent this year, it soared about 17 percent from a low at the beginning of May through a high at the end of June. Skagen has taken advantage of price gains when they occur to sell some Russian assets.

“We have used the Russian market uptick in May and June to reduce our positions in, for example, VTB Bank,” Stensrud said, referring to Russia’s second-biggest lender.

The investor says he’s looking for European companies through which to optimize the fund’s exposure to emerging markets.

In Russia, Skagen has its “focus on” X5 Retail Group NV, the country’s second-largest supermarket chain, and OAO Moscow Exchange, Stensrud said. X5 has advanced 7.6 percent year-to-date, while Moscow Exchange is down 11 percent.

“We have not changed our emphasis on company selection and security valuations,” Stensrud said. “But we are scanning the high grass for poisonous snakes.”

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.