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.
Nigel Topping who was appointed by the UK Government as the High Level Climate Action Champion for United Nations climate talks, COP26 joins Fiona Reynolds, chief executive of the PRI, in conversation with Amanda White, editor of Top1000funds.com This episode focuses on climate change and how, amongst and despite, the short-term focus of this COVID-19 crisis, we can mobilise government, business and investors into action around this important issue of climate change.
Political regimes around the world are stuck in a series of dead-ends and despair. Most importantly, the China-US relationship has hit a brick wall as their fundamentally different values and interests clash. Deterrents and robust policy is the only way forward, says Stephen Kotkin, professor in history and international affairs, Princeton University.
Singapore’s sovereign wealth fund GIC and PGIM, one of the world’s largest asset managers, have collaborated to develop a world-first asset allocation framework that explicitly models the impact of private assets on total portfolio liquidity, incorporating both the top-down allocation view and the bottom-up cash flow view.
In this Fiduciary Investors Series podcast Amanda White talks to Henry Richards, who is the project lead on the Future of the Corporation at the British Academy. The discussion is part of our exploration of purposeful companies and the premise that we need to redefine business in the 21st century to build trust between corporations, investors and society.
Already OPTrust’s portfolio can best be described as resilient. But CIO James Davis, who started his career in October 1987, expects global macro economic changes from this crisis that we have never seen before and he wants to position the portfolio for whatever is around the corner.
Looking back at the portfolios of large institutional investors during and after the dot.com crash and the GFC, CEM Benchmarking, reveals commonality in the portfolios that thrived. For both events the top quartile returns were more than 2 per cent higher than the bottom quartile. Analysing the asset allocation and behaviour of investors showed two clear themes: top quartile performers had more defensive allocations pre-crash; and rebalancing is a tailwind for performance.
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