investor’s notebook
STEPHEN CRANSTON: Getting ready to swoop?
Peregrine shareholders like the operating businesses, but not the extra risk the balance sheet investments bring
There is one thing I have learnt from 30 years of looking at financial markets, and that is not to try to predict short-term share price performance. Events get in the way. As we all know, there was a whole series of black swan events last year. This was not good news for my pick in financial services for 2016, Peregrine Holdings. It was a prime victim of the Brexit vote, as its London-based hedge fund business, Stenham, accounts for a third of its tangible net worth. This year I switched my pick to Investec, which is at least easier to understand than Peregrine and became ridiculously cheap after the Brexit vote. I also have high regard for Investec Asset Management (IAM) and its boss, Hendrik du Toit. It has an outstanding annuity stream — I won’t get into the debate on Du Toit’s package. I don’t believe the quality of IAM is sufficiently recognised in the Investec share price. Peregrine suffers as it does not have a battleship such as IAM and it doesn’t have a recognised retail b...
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