North American institutions are set to inject billions of dollars into Europe as US investors view the continent as the most attractive overseas market, according to a report by Armstrong International.
The survey of more than 300 North American institutional investors suggests almost four in five (78%) are actively looking to invest or planning to increase their allocations in Europe.
After Europe the most-favoured location for investment is Asia. Exactly two-thirds of those polled and who currently have investment in the continent said they were planning to increase their allocations.
A relatively low number of respondents (22%) currently invest in Africa. However this looks likely to change as 37% revealed they are looking to increase their allocation in the next 36 months.
The reason behind Europe’s popularity among North American investors is the “low-interest climate” across the continent, according to the Armstrong International research.
The company’s chairman Martin Armstrong called this a “pivot point” for the European markets.
“We’ve never detected this level of positive sentiment on the part of North American institutional investors. It feels very much like a land grab. After a tepid decade, this level of investment enthusiasm implies that Europe is a re-emerging economy,” he said.
Among the report’s other key findings are that alternative investments – especially private equity, real estate and infrastructure – are becoming increasingly attractive to North American investors, with European investment opportunities high on the shopping list.
The UK remains one of the countries in Europe best placed to take advantage of this interest. Foreign investment in the country reached its highest level for more than a quarter of a century last year, with nearly 1,800 projects creating almost 67,000 new jobs. And this positive trend is set to continue, according to Armstrong.
Increasing direct investment and having boots on the ground are two of the themes that come out of the report. There is an interesting positive correlation: investors who are increasing their allocations to foreign alternative investments also indicated that they would in all likelihood need to build a talent base in London and Europe’s other major financial centres.
‘Against the backdrop of a fast-recovering economy here in Britain, these findings can only be seen as an encouraging sign of future growth in the financial jobs sector,’ Armstrong concluded.
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