The Fund’s largest detractor for the quarter was a Swiss private bank holding company, EFG International (XSWX:EFGN). During the quarter, EFG International announced a proposed acquisition of one of the oldest private Swiss banks, BSI. BSI’s assets under management are similar in size to EFG’s and the combined entity would become the fifth-largest private bank in Switzerland. Due to the size of the deal, EFG will need to issue equity to finance the transaction; this news hurt EFG’s share price during the quarter. However, in our view, the longer-term synergy opportunities are significant and if the merger is executed properly, we believe that the combined entity’s earnings power should be materially higher than EFG as a stand-alone entity.
From David Herro (Trades, Portfolio)'s Oakmark International Fund: First Quarter 2016 Commentary.
