Research highlights oppportunities across Europe

Last year Europe’s economy grew at the fastest pace since 2001 and as the year ended economic confidence was close to a six-year high. Although the pace of growth may ease off in 2007, favourable conditions in Europe continue to generate a strong flow of investment opportunities.

Growth in the Spanish economy has outpaced the rest of the Eurozone for the last 11 years and even though the gap is now beginning to close, the country looks set to remain one of the region’s driving forces. Roger Guy, manager of the Gartmore European Selected Opportunities Fund, comments, “Despite the strong performance of European equity markets over the last couple of years, we continue to unearth plenty of companies with great potential. As an example, in the last quarter of 2006, the Fund profited from positions in Spanish companies, Iberdrola and Fomento de Construcciones & Contratas (FCC).

“Both companies have been involved in the recent wave of merger and acquisition activity; Iberdrola through its acquisition of Scottish Power. This enables the group to increase electricity production by almost a third, while its entrance into the UK market means it is less dependent on Spain, and less likely to be a takeover target itself. Shares in FCC climbed as the company tapped into a construction boom and diversified into industries such as cement production and recycling which offer wider profit margins and steadier income.

“Going forward, the European equities team at Gartmore will have additional help in finding investment opportunities like these. Two very experienced research analysts will be coming on board in February. Tomás Pintó Fernández has been working as an Equity Analyst at Kepler Equities (the former Julius Baer Brokerage) covering the Spanish construction sector, the Spanish Real Estate sector and Iberian toll road companies. He will be joined by Léopold Arminjon from Cheuvreux (Paris) where he has spent over two years as an Analyst focusing on the telecoms and media sectors. We look forward to tapping into the additional experience and knowledge they will bring to what is already one of the strongest investment teams in the sector.”