Stick with banks and cyclical stocks in run-up to UK vote-OMGI's Buxton

* Buxton manages around 2.2 bln sterling at OMGI

* Buxton not changing portfolio ahead of May 7 UK vote

* FTSE near record highs despite sterling volatility

By Sudip Kar-Gupta

LONDON, April 9 (Reuters) - Investors should hold on to banks and cyclical stocks and use any panic selling around the May 7 UK election to buy up more shares, said one of Britain's best-known fund managers.

Richard Buxton, head of UK equities at Old Mutual Global Investors (OMGI), said he expected the vote next month to result in a continuation of the current Conservative/Liberal Democrat coalition.

Buxton's views are closely followed by many traders due to his solid track record, which saw him take much of his former client money at Schroders (LSE: SDR.L - news) over to Old Mutual (Other OTC: ODMTY - news) when he left Schroders for Old Mutual in 2013.

"I'm certainly not making any short-term changes to my portfolio. I remain pro-financials and pro-cyclical stocks such as house builders. My personal view is that we will end up with more of the same, and a Tory/LibDem coalition rather than a Labour one," Buxton told Reuters in a telephone interview.

Buxton manages around 2.2 billion pounds ($3.2 billion) and his flagship UK Alpha fund is up 5.3 percent from December through to February, according to OMGI.

Banks and cyclical stocks are those that typically outperform in a strengthening economy and rising stock market.

Opinion polls put the right-wing Conservatives neck-and-neck with the opposition left-wing Labour party, while the Scottish National Party could emerge as the third-biggest party.

Adding to the uncertainty, the Conservatives have promised a referendum on Britain's membership of the European Union by the end of 2017 if they win.

But this uncertainty has been reflected mainly on currency markets rather than the stock market.

Bets on how volatile the British pound will be over the next month rose sharply on Thursday, while the benchmark FTSE 100 was up 1 percent and near record highs.

"To the extent that there will be any political concerns, that would manifest itself first in a weakness of sterling, which perversely could be good news for a lot of UK companies as it would help their exports," said Buxton.

"Any short-term wobbles in advance of the result should be used to buy into the market. Some of the best returns I've made have been when I've bought after a market panic." ($1 = 0.6784 pounds) (Editing by Hugh Lawson)