Ginjer Asset Management’s Leonard Cohen is hoping the contrarian bet repeats his successful 2019 call on banking stocks, a strategy that enabled his fund to outperform peers over the years since then.
Cohen’s Ginjer Actifs 360, which holds about €173 million ($196 million) in European assets, has beaten 98% of its peers in the past five years, thanks partly to a spectacular comeback by the region’s banking stocks. His pivot is now to seek value across some of the industrial sectors worst hit by overdone trade-war worries.
“Solutions exist; nothing is irreversible in this case, and when the market realises this, the rebound can be violent,” Cohen, Ginjer’s chief executive officer, said in an interview in Paris. “Things don’t need to turn out perfectly for our investments to work, just a little less dark than what the market prices during selloffs.”
Cohen has reduced his portfolio’s holdings in banking and insurance stocks to about 30% from a high of 38% during the summer of 2024. The proportion of industrial stocks, within which he includes automotive names — has climbed to 35% from 25% over more or less the same period.
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He has added basic materials, healthcare and consumer goods stocks pummelling by worries that trade disputes would lead to a global recession.
Banks continue to be one of the cheapest sectors in Europe, trading at a 40% discount to the market. Automotive and basic resources shares are also trading at cheap valuations relative to the broader Stoxx Europe 600. The 12-month forward price-to-earnings ratio of industrials in April fell to the lowest since December 2023, before reverting to its long-term average of around 19 times.
Trump’s “Liberation Day” tariff announcements a month ago unleashed mayhem in equity markets. Europe’s auto sector slumped as much as 13% in April and a gauge of regional industrial goods and services stocks plunged 17% before both recovered most of the drops.
As the tariff convulsions spread through stocks, Cohen said he saw pockets of the market become deeply undervalued. It echoes his approach when he turned overweight on banks at a time of negative interest rates, a position maintained through the pandemic and built on following Russia’s invasion of Ukraine.
“It happened during the last five years for financials and we think that it’s now happening in industrials,” he said. Cohen’s view is that trade war angst will eventually fade as the European economy picks up, with the help of German stimulus measures.
Since its inception in 2011, the fund has followed an approach of sticking to valuation fundamentals during extreme market events, Cohen said — as long as the firm’s models don’t pick up systemic crisis red flags.
“We see no sign of dislocation and Trump, who’s a pro-business person, knows when it’s time to back down,” he said.
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(Edited by : Juviraj Anchil)
