So far, so good, it’s going solidly.’ That is the verdict of Daniel Avigad on the returns he has generated for investors from the investment fund he started managing 17 months ago.
The fund in question is Lansdowne European Special Situations – before Avigad came on board it was known as Crux European Special Situations and run by Richard Pease, a longstanding investment manager. And the return he has extracted from the fund’s portfolio so far is a respectable 19 per cent – better than the average for the fund’s peer group.
Lansdowne Partners bought investment boutique Crux Asset Management in the summer of 2023. And with Pease retiring, Avigad was the obvious choice to take over the fund’s helm. For the past ten years, he has run Lansdowne European Long Only Fund from the company’s London offices.
‘I’m pleased with the way things are progressing with the fund,’ says Avigad. ‘There is a momentum which I want to maintain, and investors seem happy.’
Although the fund’s emphasis on identifying ‘idiosyncratic’ investment opportunities is the same approach that Pease adopted, Avigad has stamped his own mark on the portfolio. The number of holdings has shrunk from 40 to 30, while 85 per cent of the portfolio is different to that he inherited. ‘Many of the stocks we have bought are businesses Richard liked, but had not invested in,’ he adds.
The fund, with assets of £424 million, invests in businesses across Europe including the UK – although holdings in UK-listed companies are restricted to five per cent. It has stakes in FTSE100-listed stocks Compass and Informa. It also has a position in US-listed chemical company Linde which was previously listed on the German stock market.
Avigad is nothing but thorough in seeking out suitable investments. He and his team (two analysts and deputy fund manager Shashwat Verma) produce detailed financial reports on the companies they hold or are interested in, then discuss their findings with the management of these businesses. They then decide whether to continue to hold, reduce or increase their stake, or buy its shares.
Businesses that Avigad likes include Swedish mining company Boliden. ‘Europe accounts for 15 per cent of world demand for copper, yet only provides five per cent of global supply,’ he says. ‘Boliden owns Aitik, Sweden’s largest open-pit copper mine, and should benefit from the world’s drive towards electrification. Generally, some of the world’s largest untapped mineral deposits are to be found in Scandinavia.’ He’s also a fan of Swedish telecoms company Tele2 which he says should be a beneficiary from the consolidation of the telecoms industry Europe-wide.
While the economic outlook for Europe is rather bleak, Avigad is convinced his team will continue to find opportunities – whether as a result of global trends such as energy transition or structural change within specific industries.
Despite the good performance numbers that Avigad has achieved so far on European Special Situations, major investing platforms have yet to include it among their best buy European funds. But if he continues to outperform many of his peers, the investment case for the fund will become stronger.
For example, Interactive Investor prefers BlackRock Continental European Income, Fidelity European, Janus Henderson European Select Opportunities and index tracker Vanguard FTSE Developed Europe Ex-UK Equity Index.
Total fund charges are reasonable at 0.89 per cent and Lansdowne Partners as an investment house currently manages assets of around £6.5 billion.
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