Mercer’s chief investment strategist said emerging and frontier markets are poised to benefit from the U.S.-China conflict as global investors seek companies and projects that can avoid economic competition.
Rich Nasm, executive director of investments at the Group, which advises clients with more than $16.4 trillion in assets and has direct control over $354 billion, said non-aligned nations would lose ground as Western companies move their supply chains out of China. He said he was benefiting.
But global investors are also looking to attract investment from both sides of the conflict and put money into projects and countries that can avoid tech boycotts and other economic retaliation retaliation, Nuzum told the Financial Times. rice field.
“If China and Western countries like the United States and Canada no longer do so much trade and direct investment with each other . We should look to,” he said.
Rich Nasm said global investors are looking to put their money where they can attract investment from China and the US © Mercer
Nasm’s enthusiasm for “the theme of non-aligned emerging and frontier markets” comes as one of the world’s most successful venture capital empires splits into three independent venture capital firms in response to US-China tensions. This is in response to the announcement of plans to split into businesses.
Sequoia Capital will have one operation for the United States and Europe, another based in China, and another for India and Southeast Asia.
Mercer, who has worked a lot with wealthy entrepreneurs looking to set up or expand family offices, has seen a shift in where investors want to keep their money, Nuzum said. rice field. Entrepreneurs fear they will be exposed as well, following the rapid sanctions imposed on Russian oligarchs after the Russian government invaded Ukraine.
“Before Russia invaded Ukraine, they may have been most confident putting their money in Western banks,” he said. But now they say, he added. “I will invest my money in non-aligned emerging frontier markets .
This is already starting to benefit financial groups based outside of New York, London and Hong Kong. “Singapore benefited, but Dubai probably more,” he said.
Nuzum pointed out that not all countries will benefit equally. As investors seek economic growth and strong legal protections, countries with relatively high population growth and well-developed courts and regulatory systems are likely to receive more money. He also warned that much of the economy is so closely tied to the dollar that large inflows to non-aligned countries may not begin until the Federal Reserve finishes raising interest rates. bottom.
“A more expansionary U.S. monetary policy would really get back on track, [before then] Why fight the Fed? ” He said.
