F&C's Stanley buys CVS Group

By Laurence Fletcher

LONDON (Reuters) - F&C Investments fund manager Catherine Stanley has bought into recently-floated veterinary services firm CVS Group but has cut exposure to media stocks as she thinks they will struggle to perform.

"It (CVS) has the potential to be quite a nice business. The management team is very strong and experienced," Stanley, who manages the 81 million-pound F&C UK Smaller Companies fund, told the Reuters Smaller Companies Forum on Thursday.

CVS (CVSG.L), which looks to buy up high-quality vet practices, raised 92.7 million pounds in an initial public offering on London's junior Alternative Investment Market earlier this month.

"They can get through 5 percent price increases per year, as people are not that sensitive to how much they pay to look after their cat or dog," she said.

"In terms of capex it is low cost ... and it has very strong cash generation and a stable market. They are really the only guys in town who are able to buy up practices."

However, she said she had reduced exposure to the media and financials sectors, although she declined to name individual stocks.

"We've been selling down media and reduced financials ... They're nicely-run businesses ... But we struggle to see where the performance will come from on a six-to-twelve-month view."

The FTSE All Share Media sector .FTASX5550 has gained 0.8 percent over the past 12 months, compared with a 5.1 percent return from the FTSE All Share .FTAS index.