AUTHORS
Edge Capital Research Team
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SUMMARY
Edge Capital has seen little reason for investing in Europe during the past three years, largely because we have been forecasting anemic economic growth in the region since the first quarter of 2008. Our analysis of the evidence has led to a simple thesis: broad exposure to Europe will be poorly rewarded on a risk-adjusted basis. We tested our thesis again in the last few weeks during meetings in Europe with a number of managers, most of whom are based in London, Zurich, and Geneva. These investors in equities, credit, and real assets have their fingers on the pulse of Europe which helps clarify our research on investment opportunities there. The information we have been gathering continues to confirm our larger thesis: Europe’s structural challenges mean the region faces a prolonged period of poor economic growth. Despite the generally unfavorable outlook, we must be mindful that there are niche opportunities to generate attractive returns.
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