Liontrust's Bailey backs Sainsbury's to take on UK banks

Liontrust's Steve Bailey and Jan Luthman have bought into Sainsbury's and a number of other ‘challenger banks' on the view the new entrants to the market will take market share from the ‘big three', particularly in the mortgage sector.

The duo have allocated 7.5% of the £326m Macro Equity Income fund to Sainsbury's, Paragon Group and Money Supermarket within the new challenger bank theme. They said the three companies should be strong beneficiaries of the various schemes the Bank of England has put in place to stimulate the mortgage market. "The Bank of England has realised there are structural problems in the UK and that we cannot afford another bank bailout," said Bailey. "The risk to the mortgage market is the vast majority is controlled by the three UK income banks. The Bank is keen to dilute the importance o...