Buxton: I bought Barclays but watch what happens to rest
Richard Buxton has added to Barclays in his £2.7 billion Schroder UK Alpha Plus fund in anticipation of positive change at the scandal-hit financial institution.
The manager also claims Barclays may emerge from the Libor-rigging scandal with the smallest fine of the banks involved.
Buxton bought more Barclays stocks last week after chief executive Bob Diamond announced that he would step down over the case. The manager regards Diamond’s resignation as a “clear catalyst for change”.
But he also argues that Barclays may have been the “most pilloried” because it was the first to be fined in the case. He notes that those which co-operate with regulators - as Barclays did - tend to receive smaller fines than others involved.
Fines are expected at other institutions in the months ahead. The FSA and other regulators are investigating a host of other banks in the case and acting FSA enforcement head Tracey McDermott confirmed that Barclays “was not an isolated case”.
Buxton says: “Poor old Barclays have got the most pilloried by virtue of being the people who actually drew attention to the scale of this and co-operated with regulators. Regulators spoke [about Barclays] with pretty positive language even while slapping them.
“Let’s watch what happens to all the others. When we look back, it may be that Barclays got the most flak but actually let’s see how some of the others get fined.”
The manager also downplays the risk created by the class actions that could be launched against Barclays in the wake of the scandal. Lawsuits connected to the scandal have already started to emerge.
“Yes, there’s a risk of class actions … but I think proving what took place was of material detriment to the people launching the actions is going to be ver, very difficult and a multi-year process,” he explains.
The Schroder UK Alpha Plus fund has 16.9 per cent in financials, which is an underweight to the FTSE 100’s 20 per cent.
Is it time to take another look at commercial property?