Historical underinvestment and demographic trends like global urbanization and rising standards of living have increased demand for infrastructure upgrades. Combined with the urgent need for a sustained economic recovery, infrastructure is front of mind for investors around the world.
Head of Global Infrastructure, Ben Morton shares why 2021 is shaping up to be an attractive vintage year for the asset class.
In 2020, there are 4 very powerful and visible phenomena, the convergence of which is likely to bring tremendous change and disruption, much of which will be at the expense of incumbent business models and with significant investment implications.
The rapidly increasing administration of COVID-19 vaccines, coupled with the imminent flood of fiscal stimulus from the American Rescue Plan Act, has generated widespread expectations that the US economy will boom in the second half of 2021. Along with that optimism, however, comes concerns that inflation could spike, at least in the short term. In the Q&A below, Sushil Wadhwani, chief investment officer of QMA Wadhwani and former member of the Bank of England’s Monetary Policy Committee, offers his thoughts on the inflation question and what an uptick in pricing pressures could mean for the performance of risk assets.
Climate change is one of the defining issues of our age. Its physical manifestations are negatively affecting ecosystems, human health and economic infrastructure. The transition to a zero-carbon economy presents significant challenges, but also opportunities for investors.
To properly account for these risks and opportunities we have developed a unique approach to climate-scenario analysis. Through this, we integrate the macro and micro drivers of climate impacts on asset prices within a probabilistic framework. Our insights are then embedded in our business strategy, investment processes and the development of climate-driven solutions for our clients. In doing so, we believe we can build more resilient portfolios and generate better long-term returns for clients.
Two forces will drive a strong rebound in the global economy over the next three years: widespread vaccine roll-out allowing a progressive easing of lock-downs, and additional large scale US fiscal stimulus.