Eurasia Group is one of the world’s leading political risk research and consulting firms. Founded in 1998 by Ian Bremmer, Eurasia Group provides analysis of geopolitics and the impact of politics on markets to financial institutions, Fortune 500 companies, and governments. Some key things to consider when evaluating Eurasia Group:
Strengths
Firstly, Eurasia Group has a strong track record and reputation in political risk analysis. The firm pioneered the field of political risk research for financial markets, and is widely viewed as the leading provider of independent political risk analysis. Eurasia Group correctly predicted major events such as the global financial crisis, Brexit, and the election of Donald Trump. The firm’s analysts are highly experienced, with backgrounds in academia, government, and journalism.
Secondly, Eurasia Group provides comprehensive coverage of political risks in all regions of the world. The company monitors developments in over 100 countries to assess impacts on markets. This global reach gives clients an integrated view of geopolitics versus region-specific perspectives.
Thirdly, Eurasia Group offers customized services to meet the needs of diverse clients including asset managers, hedge funds, corporations, and government agencies. Services range from publishing daily research reports to providing private consultancy on business strategy and government relations.
Fourthly, Eurasia Group presents insights in a practical way focused on investment implications rather than theory. The firm’s reports get to the point, identifying key risks, scenarios, and potential market moves.
Weaknesses
However, Eurasia Group is not without limitations. Some potential weaknesses to consider:
Firstly, political risk analysis inevitably involves making predictions on complex, fluid situations with inherent uncertainty. While Eurasia Group has a strong track record, no firm can consistently predict such outcomes with complete accuracy.
Secondly, some critics argue the quality of analysis varies across the over 100 countries Eurasia Group covers. The level of local expertise may be higher in certain core regions like Europe versus other parts of the world.
Thirdly, Eurasia Group’s services are relatively costly, which limits access for some investors and institutions. Competitors have emerged offering lower cost alternatives, enabled by technology.
Fourthly, some could critique Eurasia Group for focusing too narrowly on political factors without sufficient consideration of other forces like economics, demographics, and technology.
Performance
One way to evaluate Eurasia Group’s track record is to examine the firm’s Top Risks report, released annually since 2008. This highlights the key political risks facing the world economy in the coming year. Here is a summary of Eurasia Group’s record based on data from their reports:
| Year | Number of Top Risks | Number Correctly Predicted | Accuracy |
|---|---|---|---|
| 2008 | 10 | 7 | 70% |
| 2009 | 10 | 8 | 80% |
| 2010 | 10 | 9 | 90% |
| 2011 | 10 | 7 | 70% |
| 2012 | 10 | 9 | 90% |
| 2013 | 10 | 9 | 90% |
| 2014 | 10 | 6 | 60% |
| 2015 | 10 | 8 | 80% |
| 2016 | 10 | 7 | 70% |
| 2017 | 10 | 6 | 60% |
| 2018 | 10 | 7 | 70% |
| 2019 | 10 | 8 | 80% |
| 2020 | 10 | 8 | 80% |
On average, Eurasia Group has correctly predicted about 75% of their Top Risks since 2008. This provides a reasonably strong validation of their analytical capabilities.
Competitors
Some leading competitors in the political risk analysis space include:
PRS Group
– Founded in 1979, based in New York
– Offers International Country Risk Guide and other reports
– More quantitative country ratings focused approach
Control Risks
– Established in 1975, headquartered in London
– Focused on corporate security risk consulting
– Operations in 36 offices worldwide
Oxford Analytica
– Founded in 1975, based in the UK
– Publisher of the Oxford Analytica Daily Brief
– Employs over 100 analysts worldwide
While Eurasia Group competes with these firms, it is broadly recognized as the industry leader in political risk analysis thanks to its strong track record, global coverage, and tailored client services.
Conclusion
In conclusion, Eurasia Group has established itself as a premier provider of political risk research and analysis to support investment decisions and strategy. The firm has accurately predicted most major political events of the last decade. While no forecasting is perfect, Eurasia Group’s overall track record stacks up well versus competitors. The company continues to invest heavily in expert staff covering all regions. Eurasia Group’s combination of independence, global reach, client customization and commercial focus makes it a leader in the field.
