Citywire Selector - For Professional Investors

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

A-rated manager: why I sold out of Argentina

A-rated manager: why I sold out of Argentina

Citywire A-rated Roberto Lampl has sold out of emerging market darling Argentina after it became too expensive.

Speaking to Citywire Selector, Lampl had a 6% allocation in his Alquity SICAV – Alquity Latin America fund.

He had previously championed the market as it was undergoing one of the most exciting recovery cycles in Latin America. 

‘We were one of the first to invest in Argentina in 2015 but I think the Argentinian market is overvalued at the moment. Although, I like the policies of President Macri and what they are doing.

'However, the $90 billion of capital flow into the country has put some pressure on the currency and I think it is overvalued,’ Lampl said.

Lampl said they need to reform and improve productivity. 'Right now they are focusing on mid-term elections but if you look at valuations, they are just pricing in a rosy scenario.

'That is why we are seeing a flurry of capital being raised through IPOs or primary transactions. We have completely sold out of Argentina.'

Lampl believes domestic growth is increasing across Latin America and other countries offer more bargains than Argentina.

He has a 9.5% allocation to Peru which he believes is benefitting from investment to rebuild the country after flooding caused by El Niño. Mining is another area which will drive growth, he added.

'Peru will benefit for the drive for more electric vehicles and that is very copper intensive. Peru is the largest producer of copper in the world after Chile and may likely become the first in the next couple of years,' Lampl said.

Brazil bounce

Brazil is the largest country allocation in the fund at 50.9% and Lampl said investment in the country had increased after recent political reforms.

Randon, a Brazilian industrial company making car and rail parts, makes up 4.3% of the fund, which Lampl believes has coped well with challenges in the country.

'It has suffered a lot because of the crisis, but they had already started a cost-cutting process back in 2014. They dismissed two-thirds of their factory floor workforce because of the crisis, but they were ready for the recovery,' Lampl said.

'The stock has already increased and we bought in February/March 2016. We have already had 100% return and we see at least another 100% over the next couple of years.'

Over three years to the end of August 2017 the Alquity SICAV –Alquity Latin America fund returned 2.54% in US dollar terms. This compares to a fall of 14.63% by its Citywire-assigned benchmark, the MSCI EM Latin America 10/40 TR USD, over the same time frame.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Events
  • Citywire Alternative Ucits Retreat 2017

    Citywire Alternative Ucits Retreat 2017

  • Citywire Milan 2017

    Citywire Milan 2017

  • Citywire Paris 2017

    Citywire Paris 2017

  • Citywire Deutschland 2017

    Citywire Deutschland 2017

  • Citywire DACH 2016

    Citywire DACH 2016

  • Citywire Italy 2016

    Citywire Italy 2016

  • Citywire Milan 2016

    Citywire Milan 2016

  • Citywire Alt Ucits 2016

    Citywire Alt Ucits 2016

  • Citywire Berlin 2016

    Citywire Berlin 2016

  • Citywire Switzerland 2016

    Citywire Switzerland 2016

  • Citywire Amsterdam 2016

    Citywire Amsterdam 2016

  • Citywire Montreux 2016

    Citywire Montreux 2016

  • Citywire Deutschland 2016

    Citywire Deutschland 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Milan 2016

    Citywire Milan 2016

  • Citywire Munich 2016

    Citywire Munich 2016

  • Citywire Paris Alt Ucits 2016

    Citywire Paris Alt Ucits 2016

  • Citywire Zurich Alt Ucits 2016

    Citywire Zurich Alt Ucits 2016