Europe’s institutional investors have largely turned their backs on currency managers after losses during the financial crisis, but investment consultants are recommending a long-term bet on one part of the foreign exchange market – for those with the stomach for a bumpy ride.

European pension schemes and insurance companies got excited about currencies in the last decade. The number of mandates awarded to currency managers grew from zero in 2003 to 61 in 2007, according to figures collated by Financial News.