Liontamer

Fund sees hope when liquidity dries up.
By ROB STOCK - Sunday Star Times | Sunday, 09 November 2008

Investors are being invited to take a punt that the embattled giants of the banking world will soon be on their way back up.

Home-grown fund manager Liontamer has launched a "fallen angels" fund designed to invest solely in banks and financial services companies that have seen their share prices decimated by a sharp decline in investor confidence in their financial strength.

The fund's returns will be dictated by an index of 12 companies including giants such as Bank of America, Citigroup, ING Group, JP Morgan Chase, UBS and BNP Paribas, which until a few short months ago were considered unassailable.

Combined, the value of their shares fell an almost unimaginable $800 billion in the year to the end of October, Liontamer has calculated.

In researching the sector, Liontamer found that a basket of shares in 43 of the best-known banks in the world had lost a combined $3.5 trillion over the past year. That did not include ANZ, Commonwealth Bank of Australia (owner of ASB), Westpac and National Bank of Australia (owns BNZ), which had seen a combined $108b wiped off the value of their shares.

Janine Starks from Liontamer said the fund was being marketed now to give investors the chance to make some positive returns from the current financial crisis. "We think it is time to take the bull by the horns and make some gains," she said.

"It is times like this that Warren Buffett is out there investing."

There is no guarantee that the lowest point has yet been reached.

Investors should take heed of the last fallen angels fund launched by Liontamer back in July, which invested in big, well- known companies which had seen their share price hammered.

The theory was the same, but by the end of September, Liontamer reported that the index determining the first fund's returns was down by 16.5%. By the end of October it was down more than 30%, though the fund has a feature that allowed the lowest point in the first six months of its existence to be taken as the starting point of the index against which the fund's returns are calculated.

Like all of Liontamer's funds, the new fallen angels fund, which is seeking to raise $150m, will also have capital protection, provided by Liontamer's parent bank KBC, which has a safe AA- rating from Standard & Poor's, but last month received a [Euro]3.5b cash injection from the Belgian government.