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FirstFT: How one man drove Capital’s €8bn European bank stock sell-off

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Single portfolio manager at Capital Group Caused a sale of 8 billion euros in European bank shares The year after the war in Ukraine and the threat of a global recession caused the investment giant to miss the sector.

Capital, one of the largest fund managers in the world with assets of $ 2.7 billion, was until recently one of the few active investors who supported European bank stocks, which went wild after a decade of reduced profitability, inappropriate behavior scandals and market share losses when reorganized. After the financial crisis.

Over the past few years, led by reputable portfolio manager Nick Grace, Capital has amassed large holdings, mostly of the top five, in lenders, including Barclays, Deutsche Bank, Commerzbank, Société General, UniCredit, Santander, BNP Paribas and UBS.

But fears of rising inflation and declining growth caused by Russia’s invasion of Ukraine have pushed Grace and some of his fellow executives to sell 8.1 billion euros a year from shares in those banks, according to people familiar with the issue and the Financial Times’ calculations.

Grace – a New Zealander from London who runs Capital’s $ 160 billion EuroPacific Growth Fund – has suffered losses to protect Capital Group from what it believes will be deeper damage.

Thank you for reading FirstFT Europe / Africa. Here’s the rest of today’s news

The latest on the war in Ukraine

  • Ties: Russia’s invasion of Ukraine sent Nervous in bond markets In the Baltic States and Finland and discouraged international investment, as fund managers seek to avoid geopolitical risks.

  • Germany: Three days after Russia invaded Ukraine, the German government said it would spend 100 billion euros on the modernization of its army. Some cops ask: What took so long?

  • energy: And Git Alkaprov, the former head of Lokoil, Russia’s second-largest oil group, has warned the EU that the country’s crude oil is “Can not be replaced”. Gazprom Energy examines a Rebranding in the UK.

  • Food security: Egypt’s finance minister, the world’s largest importer of wheat, said “Millions” could die When the war cuts off an essential grain supply.

1. EU countries have strived for additional cash demands from Brussels EU member states are preparing Demands for extra money from Brussels When the bloc’s budget came under pressure from the war in Ukraine, the refugee crisis and rising inflation. The European Commission has taken advantage of most of its budgetary maneuvering space after a series of unforeseen demands.

2. HSBC from a banking hour because of comments on climate change HSBC has Suspend Stuart KirkHead of Global Responsible Investment in the Bank’s Asset Management Division, pending an internal inquiry into a presentation he made at the FT Moral Money Summit last week, in which he said the financial risks of climate change are exaggerated.

3. The era of globalization is ending, warn business leaders in Davos The era of the three decades of globalization Risks going backwards, According to executives and investors who met at the World Economic Forum. Certification, re-nationalization and regionalism are the latest trends for companies, said Jose Manuel Barroso, chairman of Goldman Sachs International.

4. ABB and Siemens are back to launching the Norwegian battery ABB and Siemens lead a € 100 million fundraising round by Morrow Batteres, A start-up that aims to start producing in its native Norway by the end of next year. Increasing investment in battery production has become an urgent strategic goal for Europe to tackle the energy crisis.

5. Anthony Albania has been sworn in as Prime Minister of Australia Anthony Albaniz Was sworn in As Australia’s 31st Prime Minister, as his Labor Party draws closer to forming a government after elections fought for the economy and national security, in which voters rejected the Scott Morrison government’s climate and social policies.

The day ahead

EU meetings God Council General Affairs of the European Union And the Euro group of 19 finance ministers from the single currency area is meeting today in Brussels. The European Central Bank publishes statistics from the Eurozone Investment Fund, while Germany publishes the IfA monthly business confidence index

Biden in Asia US President Joe Biden will present his Indo-Pacific economic framework in Tokyo, which was Diluted Attract more countries to join the deal.

Company profits Zoom video communication release First quarter results and Kingfisher gives trade update.

What else are we reading

Italy’s economic prospects are sour as inflation bites Italy has started the year 2022 ready for strong growth and structural reforms under the leadership of Prime Minister Mario Draghi and the flow of EU funds. But e The economic outlook has become so bleak That the state is facing the possibility of a recession.

‘Fire of Decency’: Peter Hennessy on Boris Johnson Peter Hennessy has been following Westminster like no other since the 1970s. He has written emphatic books on British Prime Ministers, the Constitution, the Civil Service and the intelligence agencies. Now, almost like everyone else, he asks Where everything went wrong, and how it might go wrong.

Once described as the gossip writer of the British establishment, Peter Hennessy is one of the best contemporary historians in the country © Charlie Bibby / FT

Vive la difference between work and play France’s experience in 2017 l Allow employees “right to disconnect” The work had a limited impact. But Italy and Spain are taking similar steps and Portugal is banning companies from contacting workers outside working hours. Meanwhile, the EU is drafting a directive against work-related digital overload.

  • More about the work: Employers believe that the impression of productivity is as important, if not more so, than actual productivity. But Leadership Adviser Nels Avi urges to come An end to the curse of presence.

FT Executive Education Rankings for 2022: Demand Returns Of France HEC Paris has reached the top The twin annual ranking of FT executive education for open enrollment programs and customized courses for corporate clients for the first time, with leading academic institutions reporting an increase in demand for undergraduate courses. Read the Full ratings and profiles From the leading schools.

Late reality check for the Fed The US Federal Reserve and financial markets are experiencing a long-standing reality check on inflation and interest rates, Writes Sunel Desai, Chief Investment Officer at Franklin Templeton Fixed Income. Markets have barely begun to take into account how much the world has changed.

technology

Not a day goes by without reports of an achievement, investment or national program run by artificial intelligence, Writes Esteve Almiral, Professor of Data at the Esade School of Business and Law in Barcelona. However, the adoption of artificial intelligence is absent in most of the organizations with which we interact or work directly.

'Machine Hallucinations Space: Metaverse' by Rafik Anadol

‘Machine Hallucinations Space: Metaverse’ by Rafik Anadol. Meta says its supercomputer is needed not to run Metavers but to train the artificial intelligence models that support it © Miguel Candela / Anadolu Agency / Getty Images

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