04.10.2017 — Berenberg launches two new Europe-focused equity funds with Matthias Born
Hamburg. Private bank Berenberg is extending its range of funds to launch two new equity funds focused on all-cap Europe and the eurozone. The fund will be managed by renowned fund manager Matthias Born, who moved from Allianz Global Investors (AGI) to Berenberg at the beginning of October.
Berenberg European Focus Fund will invest in all European countries, while Berenberg Eurozone Focus Fund will be focused on the euro currency area. “With the new equity funds, we will use a fundamental selection of individual stocks to invest in those companies with the best prospects for above-average structural growth and lasting high profitability.” This is how Matthias Born describes his investment philosophy. “In doing so, we will ensure a disciplined implementation of a tried-and-tested investment approach. Short-term macro-economic trends or the index weighting of a share will not impact on the investment decision. The two new funds will feature a very concentrated portfolio with a maximum of 50 stocks”, says Born. While the focus will be on companies with a market capitalisation from around €5 billion, the addition of on average 25% of second-tier stocks will be an essential part of the strategy. The experience of fund manager Peter Kraus and his Small Cap team is a major advantage here.
Fundamental analysis and long-term investment horizon
The overall concept involves fundamental stock analysis, a long-term investment horizon and a stringent and transparent investment process. Fund management is centred on an in-depth analysis of the business model and competitive position. Intensive discussions with the company representatives as well as analysts and industry experts will help to select the companies with the best prospects. Born: “We will be focusing on the profit and cash flow growth as value drivers of share prices, as this is what promises the best returns in the long term compared to the broader market. In this way, excellent business models can grow their cash flows stably over very long periods by means of constant reinvestment, provided that high barriers to entry protect them from competitive pressure.” This approach is thus linked to a long holding period of four years on average. An investment in high-quality companies with robust balance sheets generally goes hand in hand with a lower risk profile.
Europe offers a diverse universe of unique companies
“It has been possible to generate good returns with equity investments in Europe for years regardless of the economic situation, as the region has many established market leaders and hidden champions with a global gearing”, explains Born. Most of these companies are in the industry, information technology, consumer goods and health sectors. The current sturdy economic situation is also supporting this development.
With the new equity funds, Berenberg is extending its fund range and providing alongside the flagship fund Berenberg Aktien-Strategie Deutschland and Berenberg-1590-Aktien Mittelstand a comprehensive offering in the core areas of German and European equities. “With Matthias Born, we have succeeded in hiring a very well-respected investment expert for our growth story who has unique knowledge of German and European equities,” says Henning Gebhardt, Head of Wealth and Asset Management at Berenberg.
Matthias Born (42) started his career in 2001 in the team for European second-tier stocks at Allianz Global Investors, where he initially managed an equity fund for German growth stocks as well as portfolios for European second-tier stocks. From 2007, he was hugely successful in managing Concentra, a classic German equity fund. His in-depth knowledge of German equities is widely known. His greatest success was in 2009 as co-head of the team for European growth stocks at AGI. He headed up one of the most successful teams for European equities and was responsible for client funds in the large double-digit billions. He has won several awards from fund rating agencies for his outstanding performance on the German and European equity market.
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