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Western Europe: European banking’s behind-the-scenes activist

An investment fund focused on banks with a slant on Europe and Italy might sound like a recipe for disaster, but Davide Serra of Algebris tells a story of market-beating returns and snowballing AuM, and thinks the best times lie ahead.

Illustration: David Manion

The views of Davide Serra, one of Europe’s most-influential bank investors, are bluntly expressed. 

But there are complex perspectives behind them. Take Brexit. The fall in sterling helps the profit and loss of his business, which employs largely London-based staff to distribute and invest international sector funds. 

However, as a proud, naturalized British citizen with lightly Italian-accented English, Serra is dismayed by the UK’s inward turn. He is much more enthusiastic about European unity – not least in banking and finance. He calls Brexit a disaster, especially for London’s place in the global markets.

Serra’s background as an Italian and as a star banks analyst at UBS and Morgan Stanley makes him well-placed to understand the recent flashpoints of European banking and their resolutions. It has helped him build a rapidly growing sector-focused fund of his own, investing in everything from Santander’s subordinated debt to the non-performing loans of tiny Italian savings banks.

Today he says Algebris Investments, which he cofounded in 2006 and now owns outright, is the largest asset manager dedicated to financials anywhere in the world.

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