market folly

We're posting up notes from the Sohn London Investment Conference 2015.  Next up is Guillaume Rambourg of Verrazzano Capital who pitched long Unipol Group.


Guillaume Rambourg's Sohn London Conference Presentation 2015

Long Unipol Group (BIT: UNI) 

Unipol has been a top five position for Verrazzano Capital for the past year and has performed well for the fund.

Unipol is an Italian insurance company. In 2011 it was in chapter 11.It was created by the merger of three insurance businesses that had been poorly managed. They were merged into one entity and a Euro 2bn rights issue was done to take care of the debt. Whilst the rights issue was dilutive, it gave the company a great platform on which to build. They were lucky in 2012 as the money that they raised was invested in Italian high yield bonds with yields of 5-7%. Now that the bonds appear less risky they provide the company with a strong buffer.

Unipol has transformed itself into the No. 1 in telematics. They fit devices to cars of the drivers that they insure that track speed and geography – a kind of in-car spy. With knowledge that they are being watched, drivers drive more carefully and have fewer accidents. Auto insurance is their key market at the moment.

Rambourg said that he likes self-help stories as there is less likelihood of being taken hostage by macro narratives such as the Euro or Chinese GDP.  At Unipol there is a strong CEO that is turning a previously struggling company around. It is taking its destiny into its own hands.

Unipol has a three year plan. Disposals are likely to follow. It pays a 6.4% dividend – the highest in Italy. There is M&A potential.


Be sure to check out the rest of the Sohn London Conference presentations.