Francisco García Paramés He is one of the most followed asset managers in Spain. The Spanish Warren Buffett was linked to Bestinver for more than 25 years, but since 2016 he has operated through his own fund manager, Cobas Asset Management.
Its flagship is the Cobas FI Selectionan author’s fund with a strong connection to the manager, Paramés himself. This fund seeks to preserve and generate profitability with a long-term mission by investing the legal maximum allowed in variable income, its brochure states. According to Morningstar data, the size of the fund is 861.8 million euros.
The management objective is to obtain “satisfactory and sustained profitability over time”, applying a value investment philosophy, selecting assets undervalued by the market, with high revaluation potential. In its own prospectus, the fund reminds that it may “not be suitable for investors who plan to withdraw their money within a period of less than five years.”
The fund’s portfolio is currently invested 94.26% in stocks, compared to 3.16% in fixed income and 2.59% in cash. By region, Europe (developed) predominates, with 47.15%, surpassing the 19.42% invested in North America and 16.11% in the United Kingdom. The fund also has a notable presence in developed Asia (8.47%), Latin America (3.34%) and Japan (2.42%).
Fuente: Morningstar
Focusing more on its portfolio, the fund’s main holding is Golar LNG Ltdcompany maritime natural gas infrastructure based in Bermuda that has a 7.01% weighting in the fund’s portfolio. The Paramés fund entered this company for the first time in 2017, and only In the last year it offers a profitability of 87.3%.
The mining company has a weight of 4.50% Atalaya Miningwith a portfolio value of 36.72 million. It is a mining company based in Cyprus, although it is listed on the London Stock Exchange, whose activities focus on the extraction of copper. The return in the last year is 6.28%.
Close the podium Babcock International Groupwith a weight in the portfolio of 4.23% (34.5 million). It is a British company specialized in critical and complex engineering services that support national defence. Although the company has civil contracts, Its main business is with public bodies, particularly the British Ministry of Defence.. The profitability in the last year is and 11%.
In the top 10 investments of the Cobas Selección FI there is also room for a Spanish company. The chosen one is Técnicas Reunidas, with a portfolio weight of 2.49% (about 20.3 million euros). The fund has been present in the engineering company since September 2017, and in the last year it has obtained a profitability of almost 63%.
Source: Investment Strategies
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Paramés, the great star of Value investment in Spain
Paramés is, without a doubt, one of the great asset management celebrities in Spain, having earned the nickname of the Spanish Warren Buffett for being a strong advocate of the Value investment strategy. This strategy seeks to achieve benefits through the buying shares of undervalued companiesthat is, below its real value, with potential for long-term revaluation.
The problem, of course, is knowing how to identify those companies that are undervalued from a fundamental point of view. And for this it is necessary to know the business of each one of them inside out. In this way, it could be said that Value management consists of rigorously analyzing companies and understanding their businesses, to try to determine their intrinsic value. Once this exercise is done, said intrinsic value is contrasted with its market price to identify if the companies are trading at a discount and therefore there is a good margin for them to be a good investment opportunity, always thinking more about the long term.
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