Betfair growth helps fund outperform market

Betfair growth helps fund outperform market

Monday, January 25, 2016 Totally Gaming
Blackrock's Nick Osborne backed Betfair's strategy and management

The growing importance of the gaming sector within financial markets was highlighted by Betfair’s contribution to the success of a £223m (€293.5m/$318.2m) fund during 2015.

Nick Osborne, manager of BlackRock UK Absolute Alpha, told the Financial Times newspaper that a long position in the soaring stock helped his fund dodge a difficult 12 months for the markets.

The portfolio delivered an 8.6-per-cent value increase in 2015, a year in which the FTSE All-Share index rose less than 1 per cent, and Osborne told the Financial Times that the long book was a particular source of success.

Betfair shares make up 3.3 per cent of the fund, and the 146-per-cent growth of the gaming operator’s share price over the course of the 12 months generated a profitable return.

The Financial Times reported that Osborne had historically been cautious of the stock, but made his move following changes to senior management and a strategy overhaul. The bookmaker expanded the type of customer it targets and then received a major share price boost in September when it agreed to a £5bn merger with Paddy Power.

Osborne said: “We are very disciplined about monitoring the progress of our investments against what we had expected, and this is one where we have seen genuinely consistent delivery.”

Betfair was first listed on the London Stock Exchange in October 2010 with shares at £13, and the company valued at £1.4bn. Today (Monday), Betfair’s share price is three times the original float, at £40.50, giving the company a market capitalisation of £3.8bn.
 

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