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Survey Reveals Global Asset Owners Still View Trade Wars as the Largest Tail Risk

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According to the quarterly SWFI Global Asset Owner Survey conducted in May 2018, sovereign funds, endowments and pensions take the observation that trade wars and increased protectionism is currently the biggest tail risk, a similar response from the March 2018 survey results. The survey was conducted before the June G-7 conference in Quebec in which U.S. President Donald Trump considered pulling the U.S. out of the group. Trump also accused Canadian Prime Minister Justin Trudeau, the host nation of the G-7 conference, of “false statements,” after the Canadian Prime Minister had remarks at a news conference. Trump tweeted after the G-7 meeting, “”PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around,'” Trump added. “Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”

German Foreign Minister Heiko Maas countered Trump’s remarks asking European nations to stick together, saying in a statement to reporters in Berlin, “It’s actually not a real surprise. We have seen this with the climate agreement or the Iran deal. In a matter of seconds, you can destroy trust with 280 Twitter characters. To build that up again will take much longer.”

The G-7 (Group of Seven) is a group of countries that include U.S., Japan, Canada, United Kingdom, Germany, France and Italy. The survey revealed that geopolitical risk and interest rate risk were key risks toward global financial stability.

Asset owners in the survey indicated an overweight in geographic asset allocation to Japan, India and Europe ex-UK in the next 12 months. Asset owners were bearish on allocations to listed infrastructure, gold and commodities, while bullish on credit strategies, active emerging market equities, active U.S. equities, active international equities, private real estate and cash.

Earnings Growth

Reaching a new level, 50% of respondents voted for seeing better earnings expectations for listed companies.

The quarterly survey targets sovereign funds, pensions, endowments, superannuation funds, foundations, government funds and other asset owners. Totaled estimated survey sample size was over US$ 1.14 trillion of assets under management.

According to Michael Maduell, president of SWFI, “Clearly, trade disputes among Western nations and interest rate risks are key concerns for global asset owners. Sovereign funds and pensions continue to seek out conviction managers in emerging market and international equities that can outperform. Last, Japan and India continue to attract institutional investor allocations.”

More About the Global Asset Owner Survey

This is SWFI’s fourth quarterly survey for asset owners. To participate in the next quarterly survey, CONTACT research@swfinstitute.org.

Antares Bain Capital Complete Financing Solution Backs symplr Deal

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On December 10, 2018, Antares Bain Capital Complete Financing Solution provided a senior secured unitranche credit facility for Clearlake Capital Group, L.P. to acquire symplr, a healthcare governance, risk, and compliance software-as-a-service platform from Pamlico Capital and The CapStreet Group. Golub Capital provided financing for the transaction as well.

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PSP Investments Exits Antelliq

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On December 14th, Private equity firm BC Partners, Public Sector Pension Investment Board (PSP Investments), and other minority co-investors have signed a definitive agreement with Merck, known as MSD outside the United States and Canada, to sell Antelliq Corporation, a Vitré, France-based provider of digital animal identification, traceability, and monitoring solutions. Upon close, Antelliq will be a wholly owned and separately operated subsidiary within the Merck Animal Health Division. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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JPMorgan Edges Out Hamilton Lane on Florida SBA In-State Mandate

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The Florida State Board of Administration (SBA) manages a plethora of Florida state funds, including the state’s defined benefit plans. Florida’s SBA awarded a private equity portfolio mandate which targets high-technology businesses in Florida to J.P. Morgan Asset Management. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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