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Lazard UK alpha increases exposure to real estate

Lazard Asset Management is taking a contrarian play on real estate funds and building its position to the sector within its UK alpha fund.

Fund manager Alan Custis believes British Land represents very good medium term value with a strong balance sheet and a good spread of property and segments.

He says: “We’ve been underweight in real estate for years and years. With the fall we’ve seen in the market and share price relative to the underlying fall in real estate values, we think now is the right time to be starting to build a position.

“It is somewhat contrarian if you look at the outflows you’re still seeing on property funds where there still seems to be a queue of people trying to get out of them but I always think you can make money when you do something oppositie to the mass market and the flow of investments.”

Custis says he is barbelling this and other cyclical plays with other more defensive stocks to balance the portfolio.

He says: “You need to have your foot in the cyclical camp because on days when the market goes up 2, 3,4 per cent you need to have those stocks that have the capability of going up 10, 12 per cent. At the same time, we’ve seen so far this week a fairly subdued market and it seems to be very rotational daily in terms of stocks hit so you need to look through the daily noise.

Custis remains quite positive on the housing sector and believes there are signs of the beginning of green shoots in the market.

He says: “The mortgage data has picked up for three consecutive months, mortgage availability is getting better, I think there is a pent up demand for people to move.

“It’s taking the advantage of the volatility in the market by buying reasonably priced consumer staple stocks and oportunistically buying into situations like Wolseley, where we can see 100 per cent upside.”


Cross-border fund groups ‘will target UK’

Fund sales in Britain held up better than anywhere else in Europe in 2008, according to research from Lipper. The firm says this means that cross-border players are likely to push harder for British customers.Inflows in the British market came to €9.2 billion (£8.2 billion) during the year, thanks to net sales of bond, multi-asset […]

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David Cameron appoints former adviser to Tony Blair as new pensions minister

Following a cabinet reshuffle in light of last week’s general election, David Cameron has announced that Ros Altmann will be replacing Steve Webb as pensions minister. As the industry works with one of the largest reforms to the sector in almost a century, the former adviser to Tony Blair has been tasked with ensuring that the pensions revolution does not stray off track.


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