Artisan Partners, a high value-added investment management firm, published its ‘Artisan International Value Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.38% was recorded by its Investor Class: ARTKX, 4.44% by its Advisor Class: APDKX, and 4.45% by its Institutional Class: APHKX for the fourth quarter of 2021, all outperforming the MSCI EAFE Index that delivered a 2.69% return and the MSCI All Country World ex USA Index that gained 1.82% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Artisan International Value Fund, in its Q4 2021 investor letter, mentioned ING Groep N.V. (NYSE: ING) and discussed its stance on the firm. ING Groep N.V. is an Amsterdam, Netherlands-based financial services company with a $55.5 billion market capitalization. ING delivered a 5.68% return since the beginning of the year, while its 12-month returns are up by 35.58%. The stock closed at $14.71 per share on February 16, 2022.
Here is what Artisan International Value Fund has to say about ING Groep N.V. in its Q4 2021 investor letter:
“While European bank stocks generally did well in 2021, ING performed exceptionally well—up almost 70% in euros. ING is the largest domestic lender in the Benelux and also has fintech operations with strong market positions in major markets including Australia, Germany, Spain, France, Italy and several Eastern European markets. ING is profitable, and it operates with significant excess capital that it’s accumulated over several years through retained earnings. The pandemic’s onset led to a regulatory moratorium on distributions to shareholders, who reacted by pushing the share price down to levels last seen during the 2008 financial crisis. Back in 2008, ING was thinly capitalized, overdiversified and losing money—a very different profile from its profitable and overcapitalized position in 2020. We saw this as an opportunity and increased our position, and the price rebounded 60% from the 2020 bottom. Even after that impressive gain, the shares remained cheap, trading at 58% of book value—though even that simple statistic understates the undervaluation. At the time, the bank carried an estimated €12 billion of excess capital on a market cap of €30 billion. Net of that excess capital, the shares traded at 4.6X our estimate of normalized earnings. In 2021, conditions changed. The pandemic receded, leading to relaxed regulatory restrictions on shareholder distributions. In addition, profits boomed as provisions set aside for pandemic-era credit losses proved unnecessary. Additionally, a new CEO appointed in July 2020 has done a great job focusing the business on profitable geographies. Changes to the business have both improved profitability and increased the company’s already overcapitalized balance sheet. The share price has rebounded close to book value—a much more reasonable valuation.”
Photo by Viacheslav Bublyk on Unsplash
Our calculations show that ING Groep N.V. (NYSE: ING) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ING was in 8 hedge fund portfolios at the end of the third quarter of 2021, compared to 9 funds in the previous quarter. ING Groep N.V. (NYSE: ING) delivered a -1.21% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on ING in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
