Régis Lefort, portfolio manager at Paris-based Talence Gestion, has made two main bets in the French equity funds Talence Opportunités and Talence Sélection PME he is responsible for.
The former strategy is primarily invested in French large caps with the aim of outperforming the CAC40 index while the latter provides exposure to French small/mid-caps and seeks to outperform the CAC Small index.
Speaking to InvestmentEurope, Lefort says he bets on European banks’ stocks in Talence Opportunités which he believes will have a catch-up potential.
“We have seen European bank indexes have already recovered a bit,” Lefort comments.
Financial services formed 16.88% of the fund sectorial allocation as of end August 2016 with Credit Agricole being the largest position in the portfolio (4.21%).
Other positions reinforced by Talence Gestion’s portfolio manager include French utility giant Veolia and industrial gas supplier Air Liquide.
“I have strengthened the fund’s position on Veolia, which has faced consolidation in recent months. The contracts it recently signed offer bright perspectives. Also Veolia remains an international firm with lower level of debt.
“Air Liquide is another stock I have purchased more of. The capital increase that served an acquisition in the United States has impacted the stock’s valuation, hence offering a good entry point,” Lefort says.
He also names French telecom group Iliad, that owns Free, as another bet since it showed consolidation, good results and has unveiled plans of external growth projects in Italy.
French train maker Alstom is currently facing dispute between the French government, its management and employees as the company’s historical Belfort factory is set to be shut down and production to be transferred to Reichshoffen in eastern France by the end of 2018.
Despite turmoil, Lefort argues Alstom has been one of the best performers of the fund in August (+7.7%) and that the firm’s perspectives remain bright.
As of end August 2016, Talence Opportunités had €12.43m of AUM. As at 14 September 2016, the fund performance was down -6.2% since the start of the year and returned +46.9% since inception on 30 June 2010.
In Talence Sélection PME (€21.89m of AUM as of 31 August 2016), Lefort gambled on stocks of the French tech sector that currently forms over 30% of the fund and includes software companies, IT services, digital agencies, component manufacturers, R&D.
One of his latest additions has been SII, an external R&D company facing fast growth.
“Lots of gems such as Inside Secure can be found in this space. The gamble works so far as the fund performance has risen by almost 10% since the start of the year,” Lefort points out.
As of 14 September 2016, Talence Sélection PME returned +10.1% since the start of 2016 and +45.9% since inception on 6 January 2014.