Filip Weintraub's bets for 2016
"People need food, and there is a growing demand for protein globally," says Filip Weintraub in answer to why he is investing in a chicken producer amongst others in 2016.
In an interview with the Norwegian financial magazine, Kapital, the portfolio manager of the equity fund SKAGEN Focus, Filip Weintraub, explains that he is enthusiastic about all the companies in the portfolio. Nonetheless, when asked which sector or region he has most faith in, he answers:
"People need food and there is a growing demand for protein globally. One of our companies, Pilgrim's Pride is a US chicken producer, and one of the most cost effective at that. Like everything else, demand for chicken goes in cycles, often triggered by disease, for example. The company has had a weak share price due to just such an episode.
At the same time, the company is majority owned by another holding in the fund, namely Brazilian meat processing company, JBS. That is why it has been regarded as illiquid in spite of a substantial market capitalisation. We think that JBS will use the opportunity to take over Pilgrim's Pride, or alternatively use it as a vehicle to get a listing on the US stock exchange."
A difficult start
2016 has got off to a difficult start, and stock markets have fallen sharply over large parts of the world. Being a young fund with few positions, the fall in share prices has hit SKAGEN Focus particularly hard. Filip highlights the fund's indirect exposure to China, which is one of the reasons why the fund has not delivered an absolute return since it was launched in May 2015.
"We are of course not satisfied with the fund's results after its first eight months. Nonetheless, clients still want to invest in the fund, if nothing else because there are so few funds that really do stock picking. We take it as a compliment, and it is an expression of trust that we take extremely seriously," says Filip to Kapital.
This is SKAGEN Focus
SKAGEN Focus is a highly concentrated equity fund with a broad global mandate. The overall objective is to invest in a select few investments with an exceptional risk/reward profile from an absolute return perspective.