Abhik Sen | May 28th 2012 | @GlobalMkts
The euro zone gets a bad press these days. But are the doomsayers right? Not entirely, if the views of some of the money men who spoke on a panel discussion I chaired at The Economist's Bellwether conference in London is anything to go by.
Many would agree with Oliver Sarkozy, head of financial services buyouts at the Carlyle Group (and, incidentally, recently deposed French president Nicolas Sarkozy's half-brother), who doesn't see the euro zone surviving in its current form for much longer. In his view, "Greece is the sub prime of Europe." When I asked him if he would put in a bid for the euro zone if it were up for grabs as a buyout opportunity, Sarkozy replied firmly in the negative. Former British chancellor Alistair Darling, no stranger to perfect storms but now unencumbered by the burdens of high office, said Greece should never have been allowed into the euro zone in the first place.
Yet some of those with the most at stake in the euro zone are rather more sanguine, if not positively enthusiastic about the future of the currency union. Nikhil Srinivasan is group chief investment officer of Allianz Investment Management and is responsible for steering the giant German insurer's approximately US$600 billion globally across asset classes. Many of those billions – which often end up in the pension pot of the prudent German tax payer - are invested in the euro zone, much of it in bonds issued by shaky European governments.
According to Munich-based Srinivasan, on a relative measure the euro zone still offers some of the most attractive investment opportunities and yields. He remains confident that euro-zone bosses led by German chancellor Angela Merkel will do what it takes to keep the single currency area a going concern, even if they have to bite their tongues and keep Greece on life support for years to come. Yes, the euro is going to get much weaker before it gets stronger, thinks Srinivasan, "but that's no bad thing if you are an investor."