M17 Capital Management is keeping a close eye on Russian equities, according to CIO Markus Matuszek.
In particular, his team is investing in Sistema, a controversial conglomerate that recently paid an out-of-court settlement to Russian oil giant Rosneft.
‘Many investors were fleeing the stock as they assumed Sistema could go broke. We stayed positive and now expect the 70% discount to its intrinsic value to be reduced,’ Matuszek said.
‘Another idea we like is Glencore. Even at today’s price, the company can benefit from the materials boom and has a good handle on executing efficiency gains. Furthermore, its balance sheet is now in a place where it can take advantage of M&A opportunities.’
Matuszek is also keeping an eye on interest rates and quantitative tightening, calling them ‘increasingly important elements that will drive market and stock returns over an extended period of time’.
Wollerau-based M17 is an independent investment firm that collaborated with Luxembourg-based LRI group to launch a European market neutral Ucits fund in February 2018. The fund is made up of 26 long and 18 short positions, with net exposure remaining around 10%.