The internet is now being embraced by the big incumbents across the banking sector, enabling stagnat...
The internet is now being embraced by the big incumbents across the banking sector, enabling stagnation to give way to growth, according to Neil Birrell, fund manager of Framlington New Leaders.
Birrell said: "The internet is now being seen as a positive, not a negative to the banking sector. Egg is a real winner, but needed an incumbent player leveraging off the internet to make it a success for them. It wouldn't have been a success without the name Prudential behind it."
Birrell said fears about the internet are dissipating, as even the most monolithic banks look to develop online operations.
He said after three or four years of mediocre performance, banks are starting to pickup, particularly since the second quarter.
Using HSBC as an example of the changing face of banking, he said: "HSBC used to be an example of dour Scottish management. They are now using asset management to leverage business around the world. Then they did a joint venture with Merrill Lynch to set up an online bank."
He is also keen on Skandia. He said: "Skandia is an insurance company but is mainly an asset gathering company. Skandia has a model proven to be stable in Europe, it is slightly different in the UK, but it is producing good asset growth and I believe in asset gathering. If the industry in the UK goes down that route they are in a good position."
As a result of this, Birrell now has a large weighting in the banking and insurance sector, at some 29%, which he acknowledges may sound high. He said: "We are getting exciting opportunities within all areas of financial services."
Framlington is to launch two funds on 15 December, investing in telecoms and media, respectively.
The Luxembourg based Sicavs are to be managed by Mark Hargreaves.
The telecoms fund is to include a 20% holding in mobile incumbents and 10% in alternative carriers.
The media fund will have weightings of around 45% in publishing, 25% in broadcasting, 15% in advertising, 15% in advertising and a small holding in music.
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