European stock markets have been pummelled in the wake of Britain’s decision to leave the European Union.

Not surprisingly, fund managers, including Australia’s own PM Capital, Magellan Financial Group Ltd (ASX: MFG), Platinum Asset Management Limited (ASX: PTM), Ellerston Global Investments Ltd (ASX: EGI) and Forager Funds Management have seen their international funds hit due to holdings in the likes of Lloyds Bank and ASX-listed CYBG PLC CDI 1:1 (ASX: CYB) – the UK banking spin-off from National Australia Bank Ltd (ASX: NAB).

Well, Platinum Asset Management is reportedly increasing its holdings in European Banking stocks, according to the Australian Financial Review (AFR).

The paper reports that Platinum’s position in the banks has accounted for almost half of the fund manager’s losses so far this year. Platinum’s Unhedged Fund saw its value sink 9.9% in 2015-16, compared to a 0.6% fall for its global equities benchmark. Financials account for 23% of the fund’s total assets. However, Platinum is a long term investor, and over 10 years the fund has returned 7.4% per annum net of fees against its benchmark of just 4.2%.

According to Clay Smolinski, the Unhedged Fund’s manager, European banks are being priced with large permanent falls in their earnings power and a full break-up of the European Union. But he sees that as low risk.

And that appears to be a similar view by other fund managers exposed to Europe.

PM Capital’s Paul Moore has told clients that it’s important not to jump to any irrational short term conclusions. Magellan’s Hamish Douglass has told the AFR that he thinks there’s a chance the UK doesn’t even end up leaving – but even if they do, he sees little downside risk.

In a recent update for the Magellan Global Equities Fund – or MAGELLGEF TMF UNITS (ASX: MGE) as Google Finance refers to it – exposure to Lloyds Bank was a significant contributor to the fund’s  0.2% fall for the June 2016 quarter – compared to a 4.4% rise in the index. But as the manager says, “Lloyds is well placed to meet these challenges…with a simple, relatively low risk, business model.”

Foolish takeaway

That suggests the selling has been overdone, and now might be the perfect time to consider getting exposure to Europe. Retail investors can pick from the numerous international listed companies like the ones mentioned above or directly into the iShares European Exchange Traded Fund or ISHEUROPE CDI 1:1 (ASX: IEU) which tracks the S&P Europe 350 Index.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.