Greek exit would only be 'hiccup' in Europe rally, GAM CEO says

By Giles Broom

A Greek exit from the euro area would only bring a temporary halt to the rally in European equities and high-yielding credit, GAM Holding AG Chief Executive Officer Alexander Friedman said.

?We probably have another two to three years left of this risk rally,? Friedman, 44, who oversees 123 billion Swiss francs ($130 billion) at the Swiss asset manager, said in an interview in Zurich. ?We?re going to have hiccups potentially on policy levels, of which Greece is the first one coming.?

European leaders and the International Monetary Fund agreed to step up the intensity of talks over Greece?s fate after an extraordinary meeting in Berlin Monday night about ways to avert a default. Efforts to end an impasse over funding have become urgent as the Mediterranean nation faces a debt repayment to the IMF on Friday and the expiration of a euro-region bailout by the end of June.

Friedman, who joined nine months ago from UBS Group AG, where he was global chief of investments, said investors who have used passive vehicles such as exchange-traded funds since the financial crisis are going to have to work harder to identify specific companies to buy, rather than rely on equity benchmark indexes.

?It?s been a great five years to be an investor because you could literally just sit in the rising boat of any risk assets, whether it?s equities or high yield bonds,? he said. ?Now you?re back to the old game, which is picking individual stocks where there?s accelerated earnings.?

European markets are still in a ?healing process? following the 2008 financial crisis and bailouts of indebted peripheral economies, Friedman said. That process is supported by the European Central Bank?s bond-buying program, lower oil prices and the...