Panza Capital destina la mitad de su cartera a la construcción

Panza Capital has allocated half of its portfolio to the construction sector, following two years of buying opportunities as prices have become attractive. The manager of the fund is confident that current market prices are so appealing that they will continue to purchase if the opportunity continues to grow. Construction currently presents one of the most attractive investment opportunities they have seen in years, according to the manager.

They have decided that they will not have a position as large in other sectors, or in ones they were optimistic about in the past, such as banking and defense. Beltrán de la Lastra explains that what they see in the construction sector is a large and uncomfortable opportunity, as it requires buying when sector news is bad. However, they are convinced that the market will eventually reward them, as housing is a product that remains and cannot be imported from another country.

The houses that are not built today will be built tomorrow, and they explain that countries like the United Kingdom, where attractive investment opportunities are found, build 140,000 houses a year compared to the long-term average of 200,000. The manager of Panza Capital believes that current valuations in the market assume that houses will not be built for decades.

He uses the example of Berkeley, a construction company that trades at five times the normalized earnings. The market tends to extrapolate recent events. When things are going well, they believe they will continue to go well. When they are going wrong, they think the opposite will happen. However, cycles end in both directions, according to the manager.

Beltrán de la Lastra emphasizes that today construction companies trade at low multiples compared to their earnings lows, unlike the rest of the market which has risen strongly. Beltrán de la Lastra denies that allocating 50% of their portfolio to construction represents a risk. They are prudent investors, and a position of this magnitude requires careful construction of the position.

They diversify at three levels: by company, by region, and by subsector. They invest in property developers, construction, urban regeneration, and construction products and materials. The most important aspect is valuation. Each company enters their portfolio at a price that, in their opinion, already discounts a hard cycle. They also purchase at different prices.

This strategy allows Panza Capital to seek the greatest possible profitability without assuming unnecessary risks, according to Beltrán de la Lastra. They also add that in the companies they invest in, they do not engage in speculative construction, but rather build what is sold or pre-sold. Regarding investing in Spanish construction companies during the housing crisis in Spain, Beltrán de la Lastra states that they have not invested in Spanish construction companies because they are more focused on infrastructure. They have more tolerance for leverage than we do, she commented in her presentation.