French equity specialist Louis Albert (pictured) runs the IDAM Small France fund at Paris-based boutique IDAM he co-founded with Stéphane Baudin last year.
Albert, who is also the firm’s chief investment officer and managing partner, has taken over the management of the fund, launched in December 2013 and formerly run by Delta Alternative Management, on 18 September 2017.
The IDAM Small France fund tallied €34.7m of assets under management as of 15 January 2018. Focused on French small and mid-cap equities, it applies a bottom-up and stock picking approach and seeks to outperform the CAC Mid & Small Index Net Dividends Reinvested.
“We seek to invest in undervalued companies with good growth forecasts. To achieve this, we rely on the eight-strong analyst team of IDMidcaps (the research company of the group). We reduce the investable universe through a quantitative filter to identify undervalued companies, then we conduct a fundamental analysis to build a balanced portfolio of 50 positions,” says Albert to InvestmentEurope, adding that the team conducts over 1,000 meetings a year and that IDMidcaps’ contribution to the fund remains crucial.
Commenting on the current state of the French smid cap market, Albert considers that French smid caps have caught up with their valuations. “In 2011, it was possible to invest in companies whose price earnings ratios were under 2. Today, French small and mid-cap stocks have got back to valuation levels that are in line with their earnings growth,” Albert notes.
In addition, he explains the measures implemented by the previous French government, which included current French president Emmanuel Macron, have fostered investments in local small and mid-sized companies, thanks to fiscal incentives of French equity saving plans PEA-PME among others.
Albert says the current government follows the path traced. It is IDAM’s belief that forthcoming measures should support the real economy on the long term and benefit to French companies’ valuations.
“We think that the small and mid cap market still provide very attractive opportunities, however stock picking becomes ever more important,” he highlights.
Among its current top three stocks, the portfolio manager of the IDAM Small France fund plays MND, which designs and builds solutions to develop mountain areas and facilitate mobility in tourist and urban areas.
Albert says he favours the stock for the impact that could have the forthcoming Beijing 2022 Winter Olympic Games on the growth of MND’s revenue. As of 31 March 2017, the company reported an organic growth of 15.1% and turnover of €76.4m, of which 66% was achieved outside France.
Another Albert’s bet remains leisure trailer manufacturer Trigano for its capacity to gain market shares within a supporting leisure market. Groupe Guillin, a European company producing and selling thermoformed plastic packaging is also in the likes of IDAM’s chief investment officer since Albert assesses the recent correction faced by the stock is too excessive given its leading position in Europe on its segment.