Delubac AM, the asset management arm of French group Banque Delubac & Cie, aims to open its business beyond French borders targeting Spain as its starting point.
The firm has registered its Delubac Pricing Power fund towards the Spanish National Securities Market Commissions (CNMV).
Delubac Pricing Power, carrying a track record of 12 years and assets under management of €150m, enters the Spanish market with MyFunds Office (a multi representative of French managers with presence in Madrid), and is available on the platform of Inversis.
Sébastien Legoff, CEO of Delubac AM, said: “We want to benefit mainly from the great potential offered by the Spanish market and the natural relationship between the two countries.
“We have a good product for institutional and retail investors. We want to target especially funds of funds, private banks, but also Eafis.”
The fund exclusively selects European firms with a strong pricing power. It also focuses on value components such as strength of the brand, barriers to entry, high level of innovation, intangible assets or strong cash flows that allow the company to continue growing individually in the economic cycle.
Timothée Malphettes (pictured), head of Equities at Delubac AM and co-portfolio manager of the Delubac Pricing Power fund, highlighted: “It is almost impossible, if not useless, to create something new. We prefer to be inspired by someone who has triumphed with our same style of investment, as Warren Buffett.”
The portfolio usually holds between 50 and 60 securities, with a preferred weighting limit of 2.5% and diversification by stock market value: one third of the investment ideas are mid-cap companies, another third large caps, and the last third blue chips (mega caps).
Each of the securities entering the portfolio is required to present a bullish potential of between 15% and 20% .”Valuation is one of our most important criteria. We want to avoid the asymmetry between the bullish and bearish potential caused for example by the profit warnings or by the compression of multiples”, said Malphettes.
He added: “The fund is not a collection of names, we seek real bullish potential. This is why the fund does not currently invest in companies that meet the other requirements, such as L’Oreal, Inditex or Essilor. They are good companies but the market has gone a long way with valuation.”
The exposure of the Delubac Pricing Power fund to French assets is comprised between 35% and 40%.
This bias can be partly explained by the experience of the two managers of the fund, who have been investing in French equities for the last 15 years.
Launched in 2000, Delubac AM has assets under management of €380m.