Cross-Border Investment Advisory

The most compelling investment opportunities do not confine themselves to any single country or region. In an interconnected global economy, investors who limit themselves to domestic markets forfeit access to vast pools of opportunity while concentrating their risk in ways that may not serve their long-term interests.

My career has been defined by cross-border investing. From my early years analyzing British industrial companies to my time covering European consumer businesses to my five years based in New York building transatlantic investment networks, I have developed a perspective that sees opportunity wherever it exists.

The Natural Bridge Between Canadian and British Markets

Among the many cross-border relationships available to investors, the connection between Canada and the United Kingdom holds special significance. These two markets share characteristics that make investing across them unusually natural and productive.

Both countries operate under common law legal systems that provide robust protections for shareholders. Investors can rely on transparent financial reporting, independent auditing, and regulatory frameworks designed to ensure fair treatment. Corporate governance standards emphasize accountability and long-term thinking in ways that align with patient investment approaches.

London as a Gateway to Global Opportunity

The London Stock Exchange serves as more than just a venue for British companies. It is a global financial center that attracts listings from around the world. Many of the largest companies traded in London derive the majority of their revenues from outside the United Kingdom, providing exposure to growth in emerging markets, Asia, and other regions through the familiar structure of a developed market listing.

Structural Similarities That Reduce Complexity

The practical aspects of investing across Canadian and British markets are more straightforward than many investors assume:

• Accounting standards are broadly comparable
• Dividend payment conventions follow similar principles
• Tax treaties provide clarity on withholding rates
• Skills developed analyzing Canadian companies transfer readily

European Opportunities Beyond the United Kingdom

While the United Kingdom offers a natural starting point, the broader European market provides additional opportunities that merit serious consideration:

• Germany: World-leading precision manufacturing, automation, and engineering
• France: Dominant positions in luxury goods, cosmetics, and aerospace
• Switzerland: Enduring franchises in pharmaceuticals, food products, and wealth management
• Nordic countries: Innovation in telecommunications, healthcare technology, and sustainable industries

The Persistent Valuation Opportunity

European equities have historically traded at lower valuations than their North American counterparts. The companies I seek are not representative of the European economy as a whole. They are exceptional businesses with durable competitive advantages, global customer bases, and management teams focused on creating shareholder value.

"The valuation gap means excellent European businesses can sometimes be acquired at prices significantly below what comparable companies command in North America."

Currency Considerations

International investing introduces currency exposure that must be understood and managed thoughtfully. When the Canadian dollar strengthens against foreign currencies, international investments lose value in Canadian dollar terms even if their local currency prices remain unchanged.

The Natural Hedge of Global Diversification

For Canadian investors, currency diversification often provides a natural hedge against domestic economic risks. The Canadian dollar tends to correlate with commodity prices, strengthening when oil and other resources are in demand and weakening when commodity markets struggle.

International holdings denominated in other currencies provide ballast during periods of Canadian dollar weakness. This natural hedging effect is one of the underappreciated benefits of global diversification.

Building an Integrated Global Portfolio

The goal of cross-border investing is not to own foreign securities for their own sake. It is to construct a portfolio that serves the investor's objectives better than a purely domestic approach could.

Sector Considerations Across Borders

Different countries have developed strengths in different industries:

• Technology: Concentrated in the United States with emerging centers in Asia
• Healthcare: Innovation spanning US, Europe, and increasingly Asia
• Luxury goods: Clustering in Europe, particularly France and Italy
• Industrial automation: Strongest expressions in Germany and Japan

The Role of Local Knowledge

Effective cross-border investing requires more than simply buying foreign securities. It demands genuine understanding of the markets, business cultures, and competitive dynamics that shape company performance in different regions.

My decades of experience in European markets have given me familiarity with how business is conducted across the continent. I understand the nuances of German corporate governance, the dynamics of French industrial policy, the culture of Swiss private enterprise, and the entrepreneurial energy of the Nordic countries.

The Enduring Value of Global Perspective

Cross-border investing is not a temporary strategy to be abandoned when domestic markets perform well. It is a permanent feature of sound portfolio construction that provides benefits in all market environments:

• Geographic diversification reduces risk
• Access to global opportunities enhances return potential
• Exposure to different economic cycles provides stability