Spanish manager goes value shopping after Catalan vote

Catalonia protestA Spanish investment manager went on a “classic value buying spree” following the unrest in Catalonia.

Fund managers at azValor Asset Management, which manages €1.7 billion in the Spanish capital Madrid, say they ditched cash and bought equities as other investors fled the market in the wake of Catalonia’s unofficial vote for independence.

Spanish equity funds saw their largest outflows in three years following the vote and in October the equivalent of almost €516 million left a BlackRock ETF focused on Spain.

Alvaro Guzman and Fernando Bernad, managers at azValor, said they had sharply switched out of a 22% cash position in the firm’s Iberian portfolio, lowering it to under 5% by the beginning of November.

They said the “value grab” has boosted the long-term upside potential value of the azValor Iberia FI fund by 55%, up from 40%. Were the value perceived by the duo in the portfolio to be realised, over a three-year period investors would receive a 15% annual compound return from the current market value, they said.

The fund has invested in Iberian stocks such as Almirall, FCC and Jeronimo Martins, while increasing its weight in Technicas Reunidas.

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