Bestinver Asset Management is widely regarded as one of Spain’s best asset managers. Until September 2014, the firm was home to star fund manager, Garcia Parames, who held the title of Spain’s best fund manager. Parames achieved average annual returns of 17% in the two decades he was at Bestinver (during the same period AUM grew from €250 million to €7 billion) and has since gone on to start Cobas Seleccion Fund.
Parames' three deputies, Alvaro Guzmán de Lázaro, Fernando Bernard and Beltran Parages also struck out on their own founding azVALOR Asset Management. You can read our exclusive interview with azVALOR here.
Since its pivotal managers left, Bestinver has continued to produce steady returns for investors. After Parames went, Beltrán de la Lastra took over (joined in November 2014), and he has continued his predecessor's performance. Since taking over, Bestinver's International Portfolio has returned more than 42% compared to a return of 19% for the wider European market.
At the 2017 London Sohn Conference, Beltrán de la Lastra presented his top idea in Europe today: Belfesa
Sohn London: Bestinver Manager's Top Pick
Belfesa is easy to understand as a business. The company recycles steel and aluminum with 92% of revenues coming from the sale of these recycled materials. Unlike zine miners, Belfesa buys and then resells the metal, so it's highly exposed to zinc prices. Management hedges the price of zinc to reduce volatility as much as possible -- 70% of zinc sales are hedged until 2020.
Over the years the company has had several different owners. It was first listed in Spain (1993) but was taken private and now trades on the German equity market. It was IPO'd only a month ago.
Belfesa is an established company in a steadily growing market. What's more, the company has regulation on its side. Lawmakers are increasingly demanding that steel and aluminum manufactures recycle and Belfesa, which has a near 100% market share in most markets where it operates, is the first choice. The replacement cost for each facility is around €67 million so high costs are a barrier to entry for competitors.
To add to the investment case, 90% of the company's production volume is pre-sold for the next three years.
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