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Supplements » Global Industry 2020

London roundtable: Operating in the new normal

Funds Europe – Looking forward to 2021/22, which areas do you anticipate will present good opportunities?

Smith – At Ninety One, we consider ourselves to be particularly relevant in four main areas: emerging markets, China, sustainability and as providers of what we call ‘resilient investment outcomes’. All highly relevant right now.

Overall, we passionately believe that active investing can be a force for good. So, we’re excited to make an increasingly important contribution to helping move the industry forward, to creating a more sustainable future for everyone – in every sense investing for a world of change!

Creswell – As long as corporations need to raise money to fund takeovers or invest in their business, as long as governments need to raise money, there will be capital markets. As long as there are investors, they’ll need to buy those bonds, and our job is to intermediate that process; one way or another, we stand in the middle. The professionalisation of our industry has been underway for a good ten years, the people we face at institutions now are highly qualified, highly competent, so I think the industry is very well equipped, and so I would see all of that as upside for individual firms and the industry as a whole.

Duval – The biggest opportunity we see is Asia, for all the reasons we know – the fast growth, the demographics, the innovation. The Chinese authorities are really welcoming and are opening, which shows a change in their behaviour. This is a great opportunity for us, because they want to get more mature about financial assets and savings and the structure of their own financial markets, obviously very worried about their domestic debt and the zombie debt which is there.

Beyond just China, the region in itself is fascinating, and this is the biggest opportunity for our business.

Ide – There is opportunity in Asia, but there’s opportunity everywhere for this industry. As we said at the beginning, savings levels are necessarily going up, and even these sorts of crises increase that. There are opportunities in asset classes, in alts for example, ESG, and diversity within our businesses. People often talk in very negative terms about our industry, particularly the active industry, but that isn’t supported by what we see on the ground. The future is very exciting for asset management.

Cicconetti – We are expecting markets to remain volatile, so portfolios should be well diversified in our view. Insurance-linked securities represent an interesting opportunity in the current context and something clients are happy to look at for their portfolio. There is an interesting income component, they offer low correlation with traditional asset classes and have a compelling valuation angle.

Pilbeam – The obvious topic that comes to mind is sustainable finance. The growth in ESG, in its broad term or in its specific strategies – the number of launches over recent years has been huge, and that’s going to continue to grow. Post-pandemic, the focus is already on the ‘S’, and many governments have coined this phrase of ‘building back better’. Whole populations are going to become more aware of ESG and environmental issues, so that’s a massive and quite exciting opportunity.

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