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Selectors excited by ‘contrarian’ Walewski’s move into bonds

Selectors excited by ‘contrarian’ Walewski’s move into bonds

Fund buyers have welcomed Nicolas Walewski’s move into fixed income as a typically contrarian move, and selectors are not expecting him to launch ‘plain vanilla’ products as a result.

Walewski announced yesterday that he had hired former JPM AM fund manager Antony Vallee as head of fixed income, as he seeks to develop a bond unit at his boutique Alken.

AcomeA’s Fabio Catalano, a long-time investor in Walewski’s Alken European Absolute Return fund, said it made perfect sense for the London-based group to expand beyond its core competencies.

‘In terms of the company approach, a move into bonds is a must,’ he said. ‘It is the right time to start considering building a new track record. While it is true that the current state of the bond market is challenging, the same could be said for equity markets, which are also approaching more difficult times.’

Catalano said the addition of the four-strong bond team would make Alken a ‘more complete asset manager’, which is not always an easy transition. ‘The change will largely depend on what kind of strategy they implement and how it will be consistent.

‘I don’t think they will do all this to enter the bond market with some plain vanilla product. They are more likely to implement a flexible strategy. Anything that targets positive return is always welcome. We will see how they will try to manage that kind of product.’

‘Not expected’

Catalano’s comments were echoed by Levi Sarens, fund selector at Bank Nagelmackers, who has also previously discussed investments in Walewski’s European equity funds.

‘You would not immediately expect them to enter the fixed income market, certainly not in this fragile low rate environment. On the other hand, you could also consider this a contrarian move from Walewski, completely in line with his philosophy.’

While Sarens is keen to get more detail on the proposed funds and the crossover with the European equity team, he expects the fixed income unit to leverage its existing expertise in areas such as European corporates and convertibles.

‘I am not worried about this move dampening the focus on Alken’s core equity products. After all, don’t forget: he hired a senior team with a proven track record. I cannot imagine Walewski would be involved in the day-to-day-business of a bond fund, but he will undoubtedly play his role as Alken’s CEO.’

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