Fly on the wall: how London & Capital is taking on the eurozone

Wealth Manager was given exclusive access to London & Capital’s latest asset allocation meeting.

Kicking off an open debate on Europe, London & Capital chief investment officer Pau Morilla-Giner (pictured) told the firm’s seven-strong investment team that he was less than convinced by those who say the peripheral markets are stabilising. 

‘Things are not really any better; the macro data continues to be weak,’ he argued.

‘There are people talking about the periphery stabilising. Certainly the capital markets have given this impression, and that the periphery is becoming more competitive, but I’m not convinced.

‘Just because the current account balance has improved, it doesn’t mean they have become more competitive.’

Mixed views on Europe

Head of fixed income Sanjay Joshi said he held the opposite view and was becoming slightly more positive on Europe.

‘The macro numbers are not good, there’s no question about that,’ he said, but he argued that risk premiums have fallen, Spain has been able to return to the debt markets successfully and there are signs of stability.

‘Things are not getting worse in the periphery, they are stabilising which is pretty good news. With the financial crisis in the background and the European Central Bank continuing to be a major factor, it allows a few more pro-growth policies to start seeping through,’ Joshi said. ‘The data is very scatty but the purchasing managers indices (PMI) are suggesting that things might just turn around now, even in the periphery.’

Be patient