Nicolas Walewski from Alken AM is our Fund Manager of the Month

Nicolas Walewski is Managing Director of Alken Asset Management, a fund manager founded in July 2005. Nicolas is the manager of equity strategies at Alken including the Alken Fund European Opportunities, the Alken Fund Absolute Return Europe, the Alken Fund Small Cap Europe and Alken Capital One.

Prior to founding Alken, Nicolas was manager of the Oyster European Opportunities Fund at Banque Syz in London from 1999 to 2005. During his tenure (June 1, 1999 to September 30, 2005), the Fund outperformed the STOXX 600 by an average annualized rate of 7.3%.

Nicolas began his investment career in 1993 at Credit Lyonnais in Paris as a portfolio manager of currency options and then in Frankfurt as a portfolio manager of index options. Subsequently, he was a buy-side analyst in the media and information technology sector in Europe and a fund manager, responsible for European equity portfolios with EUR 1.2 billion of assets under management.

Nicolas is a graduate of the Ecole Polytechnique de Paris and holds a Master's degree from the ENSAE (Ecole Nationale Supérieure de Statistique et d'Economie). He has 27 years of investment experience.

What made you decide to go into the financial sector? Did you have any other vocation?

Since I was very young, my father incentivized me to build small portfolios to get acquainted with the stock market. My degree as an engineer provided me the discipline and the thinking angle that has helped along my investment career.  I am passionate about what I do, and intend to continue to do research and invest as long as nature allows me to. I have not really had any other vocation other than researching companies and sectors, understanding the psychology of management teams, forecasting trends, identifying leadership, in definite terms, searching the market for opportunities.

How should investors orient their portfolios in this environment?

In my humble opinion, when it comes to equities, I believe investors should always buy as cheap as possible and be flexible with their approach. If you buy good companies, whose management teams have shown strong track records, you make sure these companies generate cash, and are not overly levered, in the long run, you cannot get it wrong.  We are already in the midst of a mild recession, where central banks are withdrawing stimulus, there is political instability worldwide, and we are possibly witnessing a paradigm change in the world’s economy. For me this is a good scenario for stock pickers. Thriving  for unique business models, featuring market share gains and trading at a decent price is what we do at Alken, what has made us generate solid long term returns.  

How is the relationship with your clients in times of market crisis? How do you manage emotions?

I always tell my sales team, we need to be close to clients understanding their investment needs, and communicate as much as compliance allows for. Well informed clients are less likely to overreact in a period of crisis and more inclined to making thoughtful decisions. I guess this applies to every aspect of life. Once we have all the pieces of information, we are more likely to make the right decisions; at the same time, having too much emotion, I consider to be dangerous at investing. I would like to believe that investors will trust our judgment at the time of crisis, and this will mean sticking with us, looking forward to the long term and trusting that, over time, we shall beat the benchmarks like we have done so far.

Give us an example of a fund that you have held for a long time in your portfolios and why.

I invest in equities and fixed income issues basically through the funds that we manage in-house. I believe this is a fairest way to align my interests with our investors’. I have invested in all funds since inception and the returns over the benchmarks have been remarkable.

What differences do you observe in the way new generations invest?

Anecdotally, I read some survey revealing that today’s majority of the fund managers, because of their age, have never been through a cycle in which value outperformed growth. We are now starting to witness one yet many investors are reluctant to look at the facts and shift their portfolios. I believe new generations like investing in trends, themes, sexy tech companies. Whilst this has worked for a long time, if my investment thesis prevails, all of these trends will get hurt and traditional value industries trading on low multiples are poised to outperform.

If you had to define yourself with 3 words, what would it be and why?

Honest, disciplined and thorough.

What are your hobbies

I enjoy playing tennis, reading as many books as I can, and watching good Opera.