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Justin Grant
Justin Grant
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Europe Still Holds an Allure to U.S. Asset Managers

Despite seemingly bad news about the Eurozone every day, a surprising number of large U.S. asset managers are still attracted to a continent that accounts for 35 percent of the world's mutual fund assets.

Day after day it seems the never-ending eurozone crisis appears to hit a new low. Confidence among businesses and consumers throughout the snake-bitten currency bloc reach its lowest point in three years yesterday. That news came on the heels of German Chancellor Angela Merkel's visit to China, where she managed to secure a pledge from Chinese Premier Wen Jiabao that China would continue to invest in European debt.

But a Chinese bailout of the embattled continent apparently wasn't on the table, and Wen said fears persist throughout the international community over the way in which the eurozone crisis will ultimately be resolved.

So against that backdrop, it comes as a bit of a surprise to see that the U.S. asset management community appears to have taken rather a contrarian view of Europe. According to Investment Europe, a surprising number of asset managers are viewing the untapped value within Europe as a once-in-a-generation opportunity since it's never been so cheap to buy.

From Investment Europe:

Even for those who survived the initial test, sliding markets following one crisis after another have prompted them to return to the relative safety of home markets.

But there is value, and there is once-in-a-generation opportunity, which many managers believe Europe presents right now. Not for a generation has it been so cheap to buy, and for ambitious asset managers wanting a global presence, increasing regulatory pressures are likely to lead to a break up of larger firms spinning off non-core businesses.

Among those announcing initiatives into Europe in recent weeks have been Wells Fargo Asset Management, Eaton Vance and Calamos. The global active manager MFS International is also spending, as is Janus Capital International.

However the piece also points out that M&A opportunities or cheap assets aren't the reason for interest in Europe. It really stems from a desire to continue diversifying away from the U.S. market.

"We started looking at this expansion well before 2008," said Karla Rabusch. A vice-president of Wells Fargo & Company, she is also president of Wells Fargo Advantage Funds, part of the corporate's Asset Management division, and head of Wells Fargo Funds Management LLC, the unit spearheading the European campaign, from a London base.

"The US is no longer growing as quickly as other areas of the world," she adds. "We have been looking for some time to leverage our strengths in Europe and Asia, and Europe does after all account for 35% of mutual fund assets in the world."

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
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