More than of the €207m Waverton European Capital Growth fund, a long-only European equities fund, is invested in the Nordics.
In this video, fund manager Chris Garsten explains why.
“We want to invest in companies where the interest of management teams is aligned with that of shareholders,” he says.
Garsten says such shareholder alignment – where surplus cash flows are returned to investors via dividends or share buybacks – is typically found in about one third of continental European companies and many of them are in the Nordics.
“As long only investors we look at the whole of continental Europe. The obvious place to start is France and Germany but despite business-friendly governments in those countries, local companies they are not run in particularly shareholder-friendly way. This is in sharp contrast to the Nordics where they do run their companies with shareholders in mind.”