“We aren’t buying Germany, we’re buying companies.”

Dr. Götz Albert, CIO at Lupus alpha, and Björn Glück, Portfolio Manager of Lupus alpha Smaller German Champions, kicked off their presentation on Germany as an economic hub with the help of dramatic staging – complete darkness in the hall, a brightly illuminated cross and the sound of a death knell. Yet what at first appeared to be a "funeral for the German economy" quickly turned out to be a dramatic device used to present a more sophisticated analysis. 

Both speakers acknowledged the serious challenges facing Germany: a dysfunctional economic policy inherited from the previous government that manifests itself in uncoordinated individual initiatives instead of a more holistic approach, as well as real location-specific issues such as the country’s crumbling infrastructure. Against this backdrop, both were quick to emphasise that “we aren’t buying Germany, we’re buying companies” – and were equally quick to highlight an array of success stories amid the adversity.

They illustrated their point using a series of examples, from a lubricant specialist that is a global leader in its field and an indispensable supplier to the chip industry to an internationally successful manufacturer of bottling plant machinery that is profiting from rising consumption in emerging markets in particular – as Götz Albert cheekily noted with the comment: "Anyone who drinks Coca Cola today will need a weight-loss injection tomorrow". A global market leader in professional steam cookers, an optical systems specialist whose expertise is vital to the semiconductor industry and an international supplier of commercial vehicle clutch systems were also used to highlight the strength and innovative capabilities of German companies.

These businesses, dubbed the “pick of the bunch” by Lupus alpha’s fund managers, are currently undervalued by the market, prompting Björn Glück to store them in a symbolic “portfolio cold store” to be enjoyed when the time is right. Their conclusion – that the German economic picture is nowhere near as bleak as it is sometimes made out to be – was significantly more optimistic than the initial staging suggested. In fact, they explained, numerous companies are successfully competing internationally and are often market leaders in their respective niches, despite the adverse political conditions.