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Bailey McCann, Opalesque New York: Financial markets are going through some growing pains as they adjust to a new market regime that includes higher interest rates, higher inflation and more volatility. Against this backdrop, asset managers will have to find new ways of driving value according to a recent outlook from Partners Group.
"In this new regime,
investors can no longer solely rely on high levels of real
growth or low interest rates to drive returns. For private
markets, this shift emphasizes the importance of value
creation through asset transformation and identifying
investment themes supported by long-term secular
trends," the outlook says.
Partners expects higher nominal economic growth across most major economies except China, a trend which could persist over the next five years. That trend could be impacted however by growing macroeconomic isolationism or other inflationary policies pursued by the incoming Trump administration or in Europe. If these policies trigger supply shocks inflation could come roaring back. Partners says that regional economic differences are likely to be highlighted over this period and could create unique dynamics for active managers.
Economic policies aren't the only ones that could have an impact. "The rising political polarization is likely to drive regulatory
changes and shift fiscal priorities," the outlook says. "As such, we closely
monitor regulatory developments and are watchful of the
reliance on governments'...................... To view our full article Click here
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