e-fundresearch.com: Why should investors consider an increase in allocation to your asset class in 2015?
Eric Robbe: Paradoxically, It is a quiet easy question to answer. All ingredients are gathered for a new m&A cycle. Companies with abundant safety cash may give this cash back to shareholders (dividend, share buy-backs), or choose external growth and get both a new process and additional market share. On the other hand, you see companies which have trouble to rebound, so they will have increase their capital or liquidate holdings or accept an acquisition offer. Financing conditions at historical low rates and historical multiples (debt/ebitda…), new buyers (Asian), more confidence from CEO’s will stimulate external growth deals. So there is a clear improvement of the universe of potential deals which allows to take position on strategic industrial mergers that present a very good risk/reward ratio.
Due to the lack of yield on cash and bonds markets and to an increasing volatility on equities markets, a thematic that should be very attractive in 2015 : Futures dividends. The market of this new asset class, easily understandable witnessed a skyrocketing growth in the past few years. Knowing that dividends are a significant component of equity returns on a long term basis, main of them are structurally discounted and uncorrelated, investors should really have an in depth view of this new asset class for 2015.
Hinweis: Eric Robbe (Laffitte Capital Management) ist Speaker beim
ARC Outlook 2015 am 21. Jänner in Wien