Speaking in Sydney yesterday to launch their new listed investment company, Antipodes managing director and chief investment officer Jacob Mitchell said investors should look to be "exposed to the positives” of macro-risk.
“Everyone thinks of macro-risk as being negative; it doesn’t always have to be negative, it can be positive,” he said.
The current Italian banking crisis is one such opportunity, with Mr Mitchell noting the unrest may lead to Italian Prime Minister Matteo Renzi successfully passing his “hugely positive” reform bills in the upcoming constitutional referendum.
Mr Mitchell said he is “pretty optimistic” concerning Italy, adding that bad loans issued by the country's banks provide an opportunity for investment banks, which Mr Mitchell explained are needed “to clean up the bad loan mess”.
“If investment banking has a future anywhere in the world, it’s in Italy” he said, noting that investment banks such as Mediobanca were likely to do “fabulously well out of fees”.
Closer to home, Korea is experiencing a trend towards better corporate governance – a factor that investors can take advantage of, he said.
Nevertheless, Mr Mitchell said he is cautious about other macro risks.
“Credit is extended as an asset class and we think companies have used a lot of debt to accelerate their growth and we’re wary of those companies,” he said.
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