Independent sentencing management.
By Nicolas Walewski Alken Fund European Opportunities Manager
You are the founder of Alken AM. What were your motivations for creating this company? management?
After successively being an analyst and then manager of other management groups, I created Alken AM in 2005 with the desire to offer completely independent management based on convictions. In view of the good performance obtained over time regardless of the market cycle, since then we have been followed by many investors. As the team has grown, we now have the opportunity to roll out our offering for wealth management consultants.
What is your management philosophy?
We are stock pickers, that is, we select portfolio values one by one. In this approach, we do not hesitate to move away from our benchmark, the Stoxx Europe 600 Net Return index. The active part of the portfolio, ie the part that does not correspond to the composition of the benchmark index, is currently over 95%.
What is the profile of the companies you include in your portfolio and which ones do you avoid?
We give preference to companies that are best managed, benefit from good governance and whose business is fully understood. Regarding the actions we avoid, in addition to the regulatory and sectoral exclusions linked to our commitments in terms of responsible finance, we refuse to invest in stocks whose business model is very recent or very unclear, as well as in those whose profession presents too many risks. This is the case, for example, of biotechnology companies and some recently listed companies. We also avoid companies that lack transparency or whose multiplicity of activities makes it impossible to have a clear vision of the strategy. In short, we favor companies in which we have strong convictions, whose valuation is attractive and whose valuation potential is significant. This gives our portfolio a high degree of security that fully plays its role in periods of uncertain markets.
How many lines does your portfolio currently have?
As it is a management based on conviction, the portfolio is built around a few dozen stocks. It currently includes 54 lines. For good risk management, however, we constantly ensure that it is subject to real diversification, whether from a sectoral or geographical point of view.
In which countries are you invested?
We are invested in many European countries with different economic dynamics. Accordingly, we hold securities listed in France, Germany, United Kingdom, Ireland, Italy, Spain, Benelux, as well as in Greece, Sweden and Norway.
And in sectorial terms, what distribution results from your stock selection?
Always in a spirit of optimization, we guarantee that we are invested in various sectors such as, currently, discretionary consumption, e-commerce, finance through securities of insurance groups or even energy. More tactically, we are also present in some industrial inventories and services.
How is your management team structured?
Our management team is based in London. It consists of 2 managers, Marc Festa and myself, 2 analysts, Reda Karkar and Brice Ferrandez. We have the support of two analyst-consultants based in Paris, Pierre Bosset and François de Nanteuil. This is entirely collegial management.
What are your current investment ideas?
We can mention the low-cost airline Ryanair, which managed to understand both the pandemic period and the evolution of the oil bill. As a result, you now have good visibility into your activity. Its fleet of aircraft is well managed, as well as its human resources and its various airport accesses. The gradual resumption of transport will have the effect of limiting cancellations that currently penalize results. Ticket prices will increase in the coming quarters, helping to strengthen the balance sheet as some of its competitors are undoubtedly on the brink of bankruptcy.
And among French values?
We are interested in the car manufacturer Renault. The group, which starts further than its competitors, is restructuring itself and making many internal improvements. Given the expected increases in margins, the stock market’s performance promises to be interesting in the medium and long term, mainly because the group’s subsidiary, Dacia, which offers good cars at lower prices, is well positioned in the current inflationary context. The low valuation of the stock is also a supporting factor.
You mentioned above your commitment to responsible finance. How is your SRI approach articulated?
Our commitment to the SRI dates back to 2012, when we signed the PRI. Since then, we have added a full-time person to the team who produces analytics and tracks companies according to the quality of governance. We are also signatories to the Task Force on Climate-Related Financial Disclosures (TCFD) and we have integrated the principles of the United Nations Global Compact, as well as the Sustainable Development Goals (SDGs), into our management. This approach leads us to have a more complete view of each file. It also leads us to have a constructive dialogue with companies.
Those who make up our portfolio today make a great contribution to the improvement of the environment and to a sustainable concept of economy. 98% of the portfolio has an ESG A or B rating. The fund is classified under Article 8 according to the SFDR nomenclature.