European equities rarely dominate global investment discussions. US technology giants and artificial intelligence continue to attract the lion's share of investor attention and capital. Yet beneath the radar, a different investment story is unfolding.

According to Birgit Olsen, Head of Entrepreneur Investments at Bellevue Asset Management, European small- and mid-cap companies offer compelling opportunities that many investors have yet to recognize.

Historically, these companies traded at a premium to their larger peers. Today, they trade at a discount of approximately 15 percent. 

rger peers. Today, they trade at a discount of approximately 15 percent.

«I think risk-return is very attractive for small and mid caps», Olsen says in the latest finews podcast.

Europe's Hidden AI Winners

One of the most interesting developments is the growing role of European industrial companies in the global AI investment cycle.

While US technology giants are spending trillions on artificial intelligence infrastructure, a significant share of that investment is flowing into a broader ecosystem of specialized suppliers.

European engineering companies, in particular, are well positioned to benefit. Many provide the technology, components and industrial expertise required to build the infrastructure behind the AI revolution.

Olsen describes these businesses as the «picks and shovels» of the AI ecosystem – companies that can benefit from the investment boom without necessarily being directly exposed to the valuations of the largest technology firms.

A Structural Opportunity for Europe

Artificial intelligence is only part of the story. Investments in energy security, electrification and infrastructure are creating additional opportunities for European companies.

Olsen argues that these structural developments could make parts of Europe's industrial sector less dependent on traditional economic cycles.

For investors seeking diversification away from the increasingly concentrated US equity market, European small- and mid-cap stocks could therefore become particularly interesting.

The Biggest Risk? Investor Behavior

Olsen also reflects on 15 years of managing Bellevue's Entrepreneur Europe Small strategy, which has delivered an annualized net return of approximately 11 percent since inception, according to the fund manager.

Her investment philosophy has remained remarkably consistent: strong balance sheets, sustainable cash flows, disciplined management and companies with committed long-term shareholders.

But what does she consider the biggest risk for investors over the next 15 years?

Her answer is not geopolitical uncertainty, inflation or another financial crisis. It is investors' tendency to panic and sell at precisely the wrong moment.

In the finews.com podcast, Olsen discusses Europe's overlooked investment opportunities, the hidden beneficiaries of the AI boom and why successful stock picking requires both curiosity and optimism.

Watch the full conversation with Birgit Olsen in the latest finews.com podcast.