Speedy end to euro uncertainty required say experts

FINANCIAL experts say continuing uncertainty over the euro zone should be tackled “sooner rather than later”, to remove a “black cloud” over corporate and investor confidence.

The Global Investment – An Opportunity for You and Your Business seminar in Liverpool – heard a prediction that Greece will probably leave the single currency in 2013.

This came from Chris Hills, chief investment officer at financial services giant Investec’s  Wealth & Investment arm, who believes preparations are already been made in Europe for this outcome.

“I can’t see how Greece can remain in – but what has to happen is Greece has to be kept in until such time such time as there is enough of a warchest available to cope with the fallout.”

He said this summer’s comments from European Central Bank president Mario Draghi that the institution is “ready to do whatever it takes to preserve the euro,” had eased the sense of crisis around the currency.

“It’s true to say the can has been kicked down the road for the last 18 months and I think there’s obviously a lot of politics at work and this makes it difficult to predict the future,” he added.

Private equity veteran David Symondson, deputy managing partner at Electra Partners, the London-based buyout firm, echoed Mr Hills’ comments, stating:  “The euro remains a great concern and the longer it takes to be resolved, the worse the outcome will be.”

He said that while the euro was a “dark cloud over everyone”, the private equity model, although changed, was not broken.”

Despitye this he said he was optimistic on future investment prospects, and said private equity firms bring discipline, incentivisation and strategy to businesses which they invest in, which helps them perform well.

“It is still possible to make good returns and you could argue that this is among the most favourable times to be active.

“There is less competition for deals as a number of funds are under water, prices are moderating and there is a good pool of management talent available.”

Mr Symondson, a Lancashire farmer’s son, said Electra was lookingto invest in businesses active in a number of “thematic” areas.

“We are not sector specific investors, it’s more thematic, so we’re looking at companies which can save consumers money as a result of austerity measures; you can’t ignore the demographic of an ageing population – so retirement homes are interesting.

“We like regulated businesses, businesses trading internationally and with growth potential in this space and also e-commerce.”

The event at the city’s Crowne Plaza Hotel was introduced by David Parkin, founder of TheBusinessDesk.com, which was media partner to Investec Wealth & Investment.

The seminar also heard from Chris Aitken, pictured below, head of financial planning at the firm, who said investors were seeking “stability and clarity” from the Government.

“I think the message needs to be ‘stop tinkering’ and give people some consistency and encourage them to start saving.”

Commenting on the investment outlook he said a balanced porfolio of assets is advisable in turbulent economic times.