There are many differences between the 2008 financial crisis and the 2020 COVID-19 induced economic crisis, not the least of which is how the policy makers have responded. In 2008 the bailout of the banks was the focus, and in 2020 the bailout of the consumer was the focus. So why have governments been focusing on the consumer, and what does that mean for investment opportunities? Is this a long-term thematic that investors should be navigating in their investment allocations?[vc_quotes layout=”accordion” 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Key takeaways
Will
This is a very weird crisis due to the level of government support being thrown at consumers.
Consumer risk transfer from banks to asset managers will continue into the future.
We believe there is still a demand for quality real estate offices in the future however retail will be challenged. Offices will not go away but it is an opportunity to upgrade and reconsider what type of space is needed.
All private asset markets have their own cycles. The real challenge is to find a market that is not commoditised.
Peter
The S of ESG is increasing in importance.
China was strong before the pandemic and even stronger now.
Physical due diligence is likely to return as soon as possible.
The extent of de-urbanisation is possibly overstated.
Matt
We are all in the same COVID storm but we are in two very different boats in terms of how people have been impacted. Young people, those with children and the self-employed are particularly vulnerable.
There have been many habitual shifts during COVID – Cash usage in the UK has been down c. 60%, and non-cash payment methods are likely to continue in the future. The buy now pay later trend has been greatly accelerated during COVID. There has also been a big shift to supporting local businesses, to investing in one’s home and spending on hobbies.
Retail has hardship but also pockets of huge opportunity.
APG's CIO Peter Branner explains how the pandemic has accelerated key trends already underway around digitization, central bank policy and action to combat climate change. It all points to fierce competition for private assets.
Joe Biden has come to the presidency with all the ingredients for success however there are a number of sweeping global trends underway that will continue whoever is in the White House. Professor Stephen Kotkin examines these trends and looks at where there may be geopolitical risk under a Biden presidency.
It will take at least an additional two years from now to eradicate the COVID-19 health pandemic despite various coronavirus vaccines being rolled out warned health experts at the FIS Digital 2020. Dr Ian Norton, former global head of WHO’s Emergency Medical Team Initiative, said a long road to normal still lies ahead.
NZ Super's recent five-year reference portfolio review saw much debate over currency risk, with the discussion elevating to the board - an unusual situation for the fund whose internal IC usually makes recommendations to the board.
As geopolitical risks increasingly stalk developed markets, asset owners sifting through the noise for long-term trends believe a fragmented world is here to stay. We spoke to CalSTRS, OPTrust, PFA and USS about the impact on their portfolios.
An LDI approach, which included a large allocation to bonds and a lot of internal investment management, helped HOOPP survive the GFC and has served it well for the past 13 years. But now – with the COVID crisis and a very low interest rate environment – that approach is being revisited and the fund is looking to invest more in alpha generating assets, and external management.
As impact investing gains momentum, the winning entries of a McGill University international investment challenge have shown the pension industry a thing or two about how to holistically tackle a triple mandate that includes impact.
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