Citywire Selector - For Professional Investors

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

Skagen’s Falnes: we are at ‘peak exposure’ to Russia

Skagen’s Falnes: we are at ‘peak exposure’ to Russia

Skagen’s Kristian Falnes has said the €5.3 billion Global fund is near the limit of where a ‘sensible portfolio’ should be in terms of exposure to Russia but is sticking to his guns.

In an investor update, the Stavanger-based manager said he currently has 6% exposure to Russia in the Skagen Global fund.

Falnes, who is one of five named managers on the fund, said he has not been swayed to reduce exposure due to the on-going conflict in Ukraine and is using Russia as a diversified, emerging market play.

He said: ‘The current situation in Ukraine and the possibility of increased Russian sanctions has sparked considerable capital out-flow from Russia as risk premiums have increased, although Skagen Global has continued to hold its positions.’

‘History tells us that investments made in times of a 'disaster' have generally been successful as a rule of thumb. If you take the example of the Fukushima nuclear disaster three years ago, investors were fleeing from Japan but in retrospect that was a huge buying opportunity.’

Resisting Russia

Falnes said the team had considered the potential to add more holdings in the country but had resisted temptation due to risk management requirements.

‘At six percent the proportion of Russian stocks is probably close to its peak in a sensible global portfolio, both from the perspective of direct exposure to the country and indirectly to a fall in the oil price,’ he said.

The team currently holds a 1.95% position in oil and gas giant Gazprom, as well as minor positions in banking group Sberbank and consumer discretionary stock CTC Media.

Speaking to Citywire Global last month, Falnes said he continues to favour emerging market countries over developed markets in his blockbuster fund. This saw him name South Korea as one of his favourite markets to back and he has taken a significant overweight here.

The Skagen Global fund has returned 18% over the past three years. This compares to an average manager return of 14.3% in the Equity – Global Equities sector over the same timeframe.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Events
  • Citywire Thailand 2016

    Citywire Thailand 2016

  • Citywire Paris Alt Ucits 2016

    Citywire Paris Alt Ucits 2016

  • Citywire Deutschland 2016

    Citywire Deutschland 2016

  • Citywire Zurich Alt Ucits 2016

    Citywire Zurich Alt Ucits 2016

  • Citywire Montreux 2016

    Citywire Montreux 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Amsterdam 2016

    Citywire Amsterdam 2016

  • Citywire Munich 2016

    Citywire Munich 2016

  • Citywire Milan 2016

    Citywire Milan 2016

  • Citywire Paris 2015

    Citywire Paris 2015

  • Citywire Paris 2015

    Citywire Paris 2015

  • Citywire Global New Ideas 2015

    Citywire Global New Ideas 2015

  • Citywire Global New Ideas 2015

    Citywire Global New Ideas 2015

  • Citywire Berlin 2015

    Citywire Berlin 2015

  • Citywire Berlin 2015

    Citywire Berlin 2015

  • Citywire Berlin 2015

    Citywire Berlin 2015

  • Citywire Alternative Ucits Retreat 2015

    Citywire Alternative Ucits Retreat 2015

  • Citywire Alternative Ucits Retreat 2015

    Citywire Alternative Ucits Retreat 2015