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European Crisis Created Global Opportunities

Dan Culloton

Dan Culloton: Did the dislocations in Europe over the past year or so with sovereign debt, defaults and bailouts. Did that create any interesting opportunities in the developed markets of Europe that you took advantage of?

Charles Pohl: Yes. I think it did and we were able to, in the international and global funds, increase our weighting in selected financial names in Europe. I think also it created a certain climate of fear that's spread across the markets and into the U.S. market as well, that allowed us to make some purchases at favorable prices. I think that also it unfairly depressed the prices of equities in the U.S. and as those concerns about European financials diminished throughout the latter part of the year I think that helped fuel the rise in equity prices in the United States as well.

Diana Strandberg: You are raising an interesting broader question and if I tie your question about sovereign debt and your question about emerging markets together, we don't equate country of domicile with where the opportunity lies. And so we were able to invest in a number of European companies when people had fears about Europe and things domiciled in Europe went down significantly. But when we looked at the businesses, in many cases the vast majority of the Company's revenues and earnings were outside of Europe. So we thought that was a tremendous opportunity for us.

Similarly, as I mentioned earlier we have a lot of investments in the international portfolio. Pharma would be an example, where in some cases the pharma companies, 25%, 30% plus of revenues are in the developing world and growing at double-digit rates. So, we think that's a way to capitalize on growth in the emerging markets, but a very attractive evaluations.