RISING prices have left the utility sector with a tainted reputation as a generator of attractive yields, according to Allianz Global Investors fund manager Simon Gergel.
Gergel has been running the Merchants trust since the end of May and said that intense M&A activity has pushed prices up making it increasingly difficult to find value. Five years ago, Gergel said sectors such as the tobacco and utilities were viewed as safe investments which provided high yields, but this universe is now shifting and private equity has removed many of the safer utility-based investments. Gergel said this new environment has created less choice for fund managers seeking attractive areas to invest in and because of this he has reduced his fund’s exposure to utilities. He...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
