European small caps offer overlooked AI exposure, fund manager says

Olsen, Head of Entrepreneur Investments at Bellevue Asset Management, told the latest finews podcast that she sees an attractive risk-return profile in European small and mid caps. Some engineering companies supply the components, technology and industrial expertise needed to build AI infrastructure, positioning them as what she calls the “picks and shovels” of the boom. They may benefit from rising investment without carrying the same direct exposure to the valuations of the largest technology firms.

AI is not the only potential source of demand. Olsen also points to investment in energy security, electrification and infrastructure. She argues that these structural trends could make parts of Europe’s industrial sector less dependent on traditional economic cycles. European smaller companies may also appeal to investors seeking diversification from a US equity market she describes as increasingly concentrated.

Olsen has managed Bellevue’s Entrepreneur Europe Small strategy for 15 years. The fund manager reports that it has delivered an annualized net return of approximately 11 percent since inception. Her approach, she said, focuses on strong balance sheets, sustainable cash flows, disciplined management and companies with committed long-term shareholders.

Asked about the biggest risk facing investors over the next 15 years, Olsen cited neither geopolitical uncertainty nor inflation or another financial crisis. She pointed instead to investors’ tendency to panic and sell at the wrong moment. The full conversation is available in the latest finews.com podcast.