Muhammed Yesilhark, head of European equities at Carmignac, has increased allocation in telecoms company Altice to make it his largest holding, despite a significant fall in its share price last year.
The manager of the €407m (£310m) Carmignac Grande Europe fund said Altice was his worst performing stock in 2015, but he has maintained his conviction in the company and nearly doubled his position.
As at 31 December, Carmignac Grande Europe had 7% in the telecom giant, nearly twice its weighting at the end of August.
He said: « Valeant is a famous hedge fund stock and some of them had around 30% in the company. So after it raised drug prices last year and came under government scrutiny, the share price plummeted and five or six hedge funds got into serious trouble.
« But many of them also held positions in Altice, some as their second largest holding, and as a result they had to sell their shares because of the losses they suffered with Valeant. »
In the three months to 30 November 2015, Valeant shares fell by 62% while Altice was down 43%. The Netherlands-based telecom giant has since seen a fluctuating share price, but Yesilhark is confident it will recover.
He said: « This is a great example of how we invest. We do the research and then take a position with a three- to five-year perspective. We will go through good times but also tougher times with business owners and always support them.
« For example, Altice completed a lot of acquisitions last year and we as shareholders supported every single one of them. »
Altice is now the second-largest telecom in France and over the last two years has acquired various firms across Europe and the US. It is the largest position across the Carmignac European funds range.
Since Yesilhark took over in January 2014, the Carmignac Grande Europe fund has returned 3.9% to 3 February versus the IA Europe including UK sector average of 1.6%, according to FE Trustnet.