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| Christian Menegatti, Managing Director & Head of Global Economic Research, Roubini Global Economics, a speaker at the marcus evans Elite Summit 2012, on private wealth management amidst the Eurozone crisis. |
London, May 2, 2012 - (ACN Newswire) - The Eurozone crisis is far from over, according to Christian Menegatti, Managing Director & Head of Global Economic Research, Roubini Global Economics. In these volatile times, private wealth managers have to put wealth preservation at the forefront, and look for growth in emerging markets with strong fundamentals, he adds.
A speaker at the upcoming marcus evans Elite Summit 2012 in Montreux, Switzerland, 30 May - 1 June, Menegatti, from one of the world's leading economic and market research firms, puts the spotlight on the Eurozone crisis and where investors may find investment opportunities.
What is the latest on the Eurozone crisis? What vulnerabilities and imbalances should private wealth managers be cautious of?
The Eurozone crisis is far from over; we have witnessed a period of relative calm and optimism before the next "storm". The Long Term Refinancing Operations (LTROs) implemented by the European Central Bank took away the tail risk of a possible Lehman-like event, but did not resolve solvency issues still present in the Eurozone, or reduce the need for deleveraging. Greece is on top of the list for further restructuring or defaults, and eventually an exit from the Eurozone by the end of 2013. Portugal will probably follow a year later. Spain and Italy are also a cause for worry.
The big question remains: How will these countries return to growth and debt sustainability? It is not obvious to us that some of those peripheral countries will be able to do so without further debt restructuring and devaluation.
- What risks to a wealth portfolio would you highlight?
We are living in unprecedented times, after the peak of a long debt super-cycle that started to reverse and resulted in the worst financial crisis since the Depression. LTROs will not solve everything; there will be a long and difficult deleveraging cycle ahead, where growth will be muted and volatility will be quite high at times.
Private wealth managers must put wealth preservation at the forefront of portfolio management. They have to make sure that they understand these deleveraging cycles, what will drive growth and asset class performance, and how policy responses can impact them.
- How can wealth managers hedge against these risks?
The key is to avoid excessive risk-taking and invest in high quality assets. Cash is not the answer in a low interest rate world. They need to look for assets in strong growth countries, with good fiscal and private sector conditions, good fundamentals and demographics, and minimal political risk.
- What investment opportunities is this presenting to private wealth managers?
In periods of high volatility, correlations tend to be quite high, so private wealth managers need to look for assets that are less correlated. In the advanced world, we still prefer US equities to European equities. At this point in time, we are starting to favour equities against bonds, given the continued attempt to reflate economies across the advanced world.
The large emerging markets with good demographics and strong productivity gains, such as Indonesia, Turkey, Brazil and India, also offer good investment opportunities. This excludes China, as significant risks to growth lie in the near future as the unbalanced Chinese economy moves towards a rebalancing process.
About the Elite Summit 2012
This unique forum will take place at the Fairmont Le Montreux Palace, Montreux, Switzerland, 30 May - 1 June 2012. Offering much more than any conference, seminar or trade show, this exclusive meeting will bring together esteemed thought leaders in private wealth management and market leading asset and fund managers for a highly focused and interactive networking event. The Summit includes presentations on every aspect of the family office space, from the latest asset allocation trends to building comprehensive technology platforms and managing family dynamics. For more information please send an email to info@marcusevanscy.com or visit the event website at www.elitesummit.com/ChristianMenegattiInterview
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Contact:
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Source: marcus evans Summits
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