Inflation, geopolitical uncertainty and private asset opportunities

The annual study, which this year covered 770 investors across 36 regions with some USD 34,7 trillion in assets under management, identified that inflation and geopolitical uncertainty remain big concerns for investors with half saying that these two topics will have the greatest impact on portfolio performance. In a response to the geopolitical uncertainty the study shows that investors will look to invest in companies with more localised supply chains with developed market equities and private equity believed to present the best opportunities over the coming years.

“Markets continue to be caught in the cross currents of concerns about rate increases and worries about recessionary risks. The study found that institutional investors’ allocations to equities may increase as they look to capitalise on the opportunities presented by the deglobalisation, decarbonisation and demographic trends. With concerns about high inflation and high interest rates, valuations matter. A renewed focus on valuations rather than speculative growth may be required,” said Johanna Kyrklund, group chief investment officer and co-head of investment at Schroders. The study also shows that investors are continuing to look to private assets in order to gain diversification