PIMCO has launched its two flagship active equity funds into the UK, focusing on deep value equity strategies.
The group recently poached Anne Gudefin and Charles Lahr to run the portfolios. The pair previously worked for Franklin Templeton, where they ran a similar strategy.
The Dublin-domiciled vehicles are the PIMCO EqS Pathfinder fund and the PIMCO EqS Pathfinder Europe fund, which form part of PIMCO's Ucits III Global Investor Series (GIS) fund range.
The funds will aim to identify mispriced stocks, distressed debt and merger arbitrage opportunities. The managers will use a bottom-up approach but will also leverage PIMCO's global economic outlook and research resources, the group says.
At present the managers are finding the best value in European companies, Lahr says.
"Historically, as global investors, we have consistently found you get the same quality and growth as any developed market with many European blue chips, but at far lower valuation levels."
They are finding some outstanding value in the consumer staples area, he adds, and also have a meaningful weighting in financials.
"We do not have an overweight, but maybe a market weight level. It is a big sector and globally, particularly in the US, we have found some interesting companies. This is not only at the smaller bank level but also in certain insurance businesses," he says.
The funds will target equities trading at an approximate 30% to 40% discount to their intrinsic value.
The portfolios will consist of 100 positions with the top 10 holdings comprising about 25% of the fund. "A high conviction, high risk adjusted return potential equity would probably be a 3% position," says Lahr.
For the full interview see next week's issue of Investment Week.
