“Nell last 18 months the flow of liquidity in the markets of private assets has changed radically. Investment strategies that have been successful in the past face several challenges.” This is what he claims Nils RodeChief Investment Officer of Schroders Capital – one of the main global financial groups, with assets under management and administration of 846.1 billion euros – commenting on the 2024 outlook for private markets. “We believe we have entered thewas that we called “3D Reset”which indicates how the dynamics of decarbonisation, demography and deglobalisation are changing the investment landscape – explained Rode –. Added to the 3D themes is the technological progressparticularly the artificial intelligence revolution, currently driven by venture capital and set, in our view, to reshape our lives.”
The role of decarbonisation
“There decarbonization will proceed at different speeds in different places. We expect it will generate a rich and deep vein of opportunity for decades to come,” underlines the Chief Investment Officer of Schroders Capital. The infrastructure investments, both in shares and in debt securities, have a leading role in decarbonisation and in the current difficult context constitute a particularly interesting investment case. “We see opportunities also in adjacent technologies such as hydrogen, heat pumps, batteries and electric vehicle charging, which will play an important role in promoting the decarbonisation of sectors such as transport, heating and heavy industry,” he added.
The demographic impact
In many emerging countries, India first and foremost, the population is increasing and over the next twenty years, young people will contribute to solid economic growth. India’s youth is in stark relief contrast with demographic ageing of the majority of other large countries. However, the effect of age distribution is expected to be dampened by the exploitation of artificial intelligence, which will significantly increase productivity in the near future. “Among the assets fundamental classes for demographics we find real estate: to meet the rapid evolution of the demographic picture, different types of housing will be necessary that respond to the needs of different ages and stages of life – underlined Rode –. Furthermore, if the average age of the population increases, so does the health spending of the country, which generates investment opportunities related to healthcare, across the entire private asset landscape.”
The phenomenon of deglobalization
The Covid-19 pandemic and the recent increase in geopolitical tensions have brought the issue of resilience and security of supply chains to the fore. In some fundamental sectors, that of semiconductors in particular, there are “nearshoring” initiatives triggered cwho have brought supply chains closer to user locations; we believe that this trend will continue in parallel with the growth of global “multipolarity”.. “Looking at the asset classes to favor in terms of deglobalization let’s see in particular the Indian private equity, which is rapidly maturing with an expanding ecosystem of local fund managers – highlighted the Chief Investment Officer of Schroders Capital –. Indian startups are taking advantage of the country’s digital revolution to reshape sectors, in a transformation that sees i at the forefront consumer goods, financial services and IT. In India they are more than 100 unicorns born, i.e. private startups valued at over a billion dollars; this data places the country at third place for creation of unicorns, after the United States and China.”