Wed, May 25, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Three 'game changers’ have limited contagion in European markets

Friday, May 17, 2013

This piece was authored by Melanie Rijkenberg, CFA, Associate Director, Pacific Alternative Asset Management Company Europe LLP.

Since the start of the year we have seen a clear de-correlation in global markets and most notably within European equity markets despite several potentially contagion causing events occurring over the last few months. In short order: the Cyprus saga and Italian elections surprise in February, rising Slovenia liquidity issues in March, and worrying economic data out of the "strong man of Europe" (Germany) early in the year.

But, contagion is no longer in vogue. The primary reason that contagion has been limited and correlations have dropped is in my view due to three "game changers" that occurred during 2012 that have taken the tail risk of an EU currency bloc break up off the table in many investors’ minds. These game changers are the announcement of a backstop in the form of the OMT, the decision by the European Council to establish a single bank supervisor and pave the way for a banking union, and the actions to keep Greece in the euro. Simply put, politicians "came through" when they needed to.

The game changers described above in combination with under-exposure to European equities in global institutional investors’ portfolios, improving global economic data and QE in the US and Japan, and relatively attractive European valuations had caused flows ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Paul Tudor’s hedge fund trims fee amidst poor performance, keep investors[more]

    Komfie Manalo, Opalesque Asia: Paul Tudor’s $11.6bn hedge fund firm Tudor Investment Corp. announced on Monday it would slash down fees of one of its biggest fund to 2.25% of assets and 25% of profits amidst backlash arising from poor performa

  2. West Virginia objects to Alpha Natural sale to hedge fund[more]

    From AP/Heraldcourier.com: West Virginia's environmental authority has filed an objection to the proposed $500 million sale of Alpha Natural Resources' assets to a hedge fund, arguing that the deal could leave the state holding hundreds of millions in reclamation liabilities. The Register-Hera

  3. Mitch Petrick leaves Carlyle as his hedge fund unit suffers losses while assets expand[more]

    Komfie Manalo, Opalesque Asia: Mitch Petrick will be leaving Carlyle Group as head of its hedge funds unit overseeing about $34bn as of March 31, after several funds under his management suffered losses while assets expanded, various media reported. Petrick joined Carlyle in 2010 and was a former

  4. Institutions - Kentucky pension leans into hedge funds amid governance turmoil, Korea's NPS names finalists for initial $1 billion hedge fund-of-funds allocation[more]

    Kentucky pension leans into hedge funds amid governance turmoil From AI-CIO.com: The Kentucky Retirement Systems moved to increase its hedge fund allocation as controversy reigned over fund leadership. Following a string of high-profile hedge fund exits, the Kentucky Retirement Systems (

  5. Fund Profile - The hedge fund that couldn't stay open long enough for a big payday[more]

    From Bloomberg.com: Toby Dodson waited six months for his bet against a fragile Portuguese bank to pay off. But before the reckoning, word came down from his hedge fund bosses at Achievement Asset Management in Chicago: get ready to clear out your desk and unwind your trades, we’re shutting down. Th