Bloomberg Invest Global – Day 3
By Bloomberg Live
Even as a vaccine light at the end of the pandemic tunnel grows brighter every day, institutional investors are still predicting significant headwinds in the near term as social, political and economic upheaval continues to dominate headlines and roil markets. The economic effects of the pandemic in many ways significantly altered the financial landscape that faced investors at the beginning of 2020, and while the core issues—fee pressures, low rates, volatility—have not fundamentally changed, they have been greatly exacerbated. But among the uncertainty lies opportunity.
Even as many investors begin 2021 in defensive postures, there is a case to be made that those who adopt aggressive, active postures throughout the year may be best positioned to benefit the most from any significant economic rebounds. An increased risk appetite could mean outsized returns for those with the mettle to put money to work in sectors such as emerging market equities and alternatives, including Bitcoin, private debt and private equity.
At this year’s Bloomberg Invest Global we will again focus on the key issues driving institutional investment strategies, offering valuable insights from top investors on how smart money can safely navigate an uncertain and risky environment. We’ll take the measure of the recovery and put 2021’s most popular strategies under the microscope to see what has worked and what hasn’t as we look ahead to 2022.
- Omar Aguilar, Managing Director and Chief Investment Officer, Schwab Asset Management
- Orlando Bravo, Founder and Managing Partner, Thoma Bravo
- Mark Delaney, Deputy Chief Executive and Chief Investment Officer, Australian Super
- Kirill Dmitriev, CEO, Russian Direct Investment Fund
- Lauren Hochfelder, Managing Director, Deputy Chief Investment Officer of MSREI and Head of MSREI Americas, Morgan Stanley
- Nuno Matos, Chief Executive, Wealth and Personal Banking, HSBC
- Steven Mnuchin, Founder, Liberty Strategic Capital; 77th United States Secretary of the Treasury
- Shu Nyatta, Managing Partner, SoftBank Group International
- Sheila Patel, Vice Chairman, B Capital Group
- Adam Schwartz, Co- CEO and Co-Chief Investment Officer, Angelo Gordon
- Lisa Abramowicz, Anchor, Bloomberg Television
- Haslinda Amin, Anchor, Bloomberg Television
- Yousef Gamal El-Din, Anchor, Bloomberg Television
- Ed Hammond, Deals Reporter, Bloomberg
- Caroline Hyde, Anchor, Bloomberg Television
- Kailey Leinz, Co-host, Bloomberg Surveillance: Early Edition, Bloomberg Television
- Yvonne Man, Co-anchor, Bloomberg Markets: Asia, Bloomberg Television
- Haidi Stroud-Watts, Anchor, Daybreak Australia, Bloomberg Television
- David Westin, Anchor, Bloomberg Television
Click here to view video of today’s event.
The first part of the day was dedicated to What’s Next for Global Wealth & Investing. The ultra-wealthy are turning into a major driving force for investing trends across multiple markets. After fueling the SPAC boom, many reports identify digital assets as the next area set for market-shifting inflows from high-net-worth investors. To find out what’s next for global wealth and the latest investor trends, top investors and wealth managers offered their insight into the key investment strategies and tactics that are helping their clients achieve market-beating growth and long-term wealth security.
To begin, Nuno Matos, Chief Executive, Wealth and Personal Banking, HSBC spoke with Bloomberg Television’s Yvonne Man. They spoke about the potential anti-sanctions law in Hong Kong. In terms of clientele, Matos said: “We continue to focus on our customer needs. [The Singapore Market] is attractive, but it’s about winning in Asia. By 2025, Hong Kong will be the #1 cross-border wealth hub, and Singapore is the fastest growing. We want to be there. We recently announced an acquisition in Singapore–for us, it’s Hong Kong, Singapore, and all the wealth hubs where we are present.”
Next, Mark Delaney, Deputy Chief Executive and Chief Investment Officer, Australian Super spoke with Bloomberg Television’s Haidi Stroud-Watts. “The Australian dollar tends to go up in value in an economic downturn,” Delaney said. “I think a lot of plans will move to currency with less fixed interest, and diversify…in the next five years or so. We think you’d need to have a long position in FX, and at the margin, you might swap some of your bond exposure for FX exposure.”
Omar Aguilar, Managing Director and Chief Investment Officer, Schwab Asset Management, spoke on his 2022 outlook with Bloomberg Surveillance’s Kailey Leinz. “We try to take emotions out of the market and focus on the long term,” Aguilar said. “We just went through a month where we had significant negative returns in the market, which is something investors have not been used to since March of 2020. That mentality of buying the dip: ‘Is it a good time for us to repurpose those assets, to rebalance?’ There is a temptation to time the market. Our process in educating clients always says that timing the market is very difficult. It is better to find assets you want to buy and have a strategy that allows you to systematically get into them.”
After that, Orlando Bravo, Founder and Managing Partner, Thoma Bravo discussed Miami’s growth in the tech industry with Bloomberg Deals Reporter Ed Hammond. “A new tech hub is being created, people can be entrepreneurial, and it gives a big opportunity for young future leaders to set their own mark,” Bravo said. One sector young people can be especially influential in is retail investing. “The retail investor of today is totally different from the retail investor of 20, 30 years ago. These are smart, highly educated, talented, and in many cases, young adults. They want in the game. And if you don’t provide access to private equity, venture capital for these great retail investors, they will find it in other ways in the public markets that regulators don’t like, like SPACs or other ‘high-risk’ areas. I think the regulators are not giving the retail investors the credit they deserve in terms of sophistication. They have been innovators in the space in many ways.”
Sheila Patel, Vice Chairman, B Capital Group discussed lessons from Asia’s digitization with Bloomberg Television’s Haslinda Amin. “In many cases, someone is able to do multiple things with an app on their phone,” Patel said. “In the U.S or Europe, you’ve tended to see very tight verticals of development in these technologies: something is checking and bill payment only; it doesn’t also have savings, you can’t also use it in a grocery store. So you have a proliferation of apps. Whereas what you see in Asia, in many cases, is an all-encompassing ecosystem that keeps the person in the business more and solving their everyday problems with one company rather than several.”
Shu Nyatta, Managing Partner, SoftBank discussed SoftBank’s initiative in Latin America and their $100 million Opportunity Fund with Bloomberg Television’s Caroline Hyde. Nyatta said the firm decided to create the fund after realizing there was a lack of cross-communication with international investors. “No one from Latin America was showing up in Tokyo,” he said. “We looked into the region, set up funds into the region, people will show up. The entrepreneurs are there, the ecosystem is maturing, everybody understands how to build a startup now. All we were missing was a committed capital partner for the long haul. That playbook of if you show up, you show commitment and you plant a flag, entrepreneurs will come. It’s proving to be true in Latin America, in our Opportunity Fund with entrepreneurs of color, in Miami.”
Steven Mnuchin, Founder, Liberty Strategic Capital; 77th United States Secretary of the Treasury discussed goals for his new fund with Bloomberg Television’s David Westin. Mnuchin said their investments would stay in regulated entities: “I’ve been regulated when I ran an OCC bank, and I’ve been a regulator, so I understand both sides. We actually like investing in companies in regulated entities because we think the legal and political risk is a lot less. And I think their safety is in a regulated institution, particularly a U.S. institution, whether it’s regulated by the OCC or regulated by fintech or regulated by the SEC. As an investor I would be very careful investing in unregulated entities. There are clearly places where it makes sense to do that. But one has to be aware of the regulatory risk.” On cybersecurity, Mnuchin added: “I think cyber is the number one, most important strategic issue to every single company around the world.
Kirill Dmitriev, CEO, Russian Direct Investment Fund gave a market outlook on the investor landscape with Bloomberg Television’s Yousef Gamal El-Din. Dmitriev talked about the Sputnik V vaccine. Mexican data shows that it has the least amount of side effects. On efficacy, “we see 83% protection from infection and 91% effectiveness against hospitalization.” He blames lack of WHO approval on bureaucracy. “We want to make a contribution, but without [the WHO] we have no production capacity.”
Finally, we took a look at real estate with Lauren Hochfelder, Managing Director, Deputy Chief Investment Officer of MSREI and Head of MSREI Americas, Morgan Stanley and Adam Schwartz, Co- CEO and Co-Chief Investment Officer, Angelo Gordon. They spoke with Bloomberg Television’s Lisa Abramowicz. In the leisure part of the industry–which relies heavily on travel–Schwartz said Angelo Gordon has been more active in domestic destinations. They’ve purchased hotels in U.S locations such as Vail, Colorado and San Francisco because “it’s going to be a couple years until people get back to traveling where they used to–if they get back to it at all.” Hochfelder spoke about the lasting implications of office exoduses in big cities and what that means for return to office. The industries that have done poorly, she explained, will be less active in real estate development, whereas “companies that are performing well, that want their employees back to the office and are investing in high quality office space.
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