Time to Start Picking Up European Trash?
The first panel discussion at the CNBC and Institutional InvestorDelivering Alpha conference saw a sharp, if polite, divide on the subject of Europe.
Peter Briger, principal and co-chair of Fortress Investment Group, said that European debt is "underpriced." Despite widespread worries about the future of the Eurozone, the risk premium on European credit assets still aren’t high enough, Briger argued.
“Financial services garbage collection will be a huge opportunity in the next five years,” Briger said. But not yet.
“Prices just aren’t interesting to us here,” Briger said.
Richard Perry, the chief executive of Perry Capital, thinks the time to start picking up the trash is now.
He argued that European debt was oversold because so many institutional investors and banks have been forced to sell off their European assets, as the market discounts any investment it discovers has sizable exposure to Europe.
"At the end of the quarter, you can't have Spain and Italy on your books,” Perry said.
This has created a buying opportunity, according to Perry. He likened Europe’s situation to the height of the financial crisis in the U.S. Many institutional investors were forced to sell off all their mortgage exposure, creating value for buyers who could afford to hold the assets despite market pressures.