At mallowstreet Insights, our mission is to help you give targeted presentations, develop wholly relevant, fit-for-purpose products, and create more engaging content. We conduct expert research sponsored by leading asset managers and develop cutting-edge analytics to equip them with actionable insight and put them in touch with the most engaged leads.

To make sure we focus on the right topics, we regularly monitor the asset classes and solutions that you and your peers talk about in the press – and compare them to the asset allocation plans of UK pension schemes. Here are three key questions you should consider given the latest market developments – and how we can help you address them, so contact us asap if you are interested in learning more.

 

 

Hiring in alternatives and illiquid assets has accelerated since last month – in some cases fourfold. New product launches are likely to follow, but what areas should you prioritise?

For the last two years, property investments have been met with widespread scepticism, while infrastructure – with enthusiasm. One reason for this is the ESG credentials of such investments. Decarbonising property development remains quite challenging, and refurbishing existing property is not the favoured approach. In comparison, infrastructure is at the centre of the climate transition.  

These considerations will likely make UK institutional investors quite discerning about the real assets they select – it also matters if they need them for cashflow matching or as long-term investments to align portfolios to net zero.  

Here are three things you can do to quantify the concerns and opportunities investors see in real assets investing: 

 

To combat inflation and the compounding effects from recent government policy, the Bank of England is buying up gilts, but looks set to increase interest rates further in November. The market is moving from QE to QT – and with most central banks raising rates globally, many now worry this tightening cycle will result in a harsh economic downturn. 

Against this backdrop, managers have increased their focus on inflation-linked bonds and asset-backed securities, but pension schemes are not too keen on liquid fixed income markets at the moment. 

One area which might be isolated from the unprecedented market volatility is social bonds – their popularity has reached an all-time high on our press radar, meaning that managers are increasingly focusing on such investments. This is perfect timing given that the Department for Work and Pensions has formed a task force to help trustees address social risks and considerations. But what are the obstacles to making the ‘social’ part of ESG investable? 

While the Trustee Survey 2022, in partnership with Janus Henderson Investors, will touch upon some of the latest ESG regulatory developments, we are looking for a partner for the first ever Social Risks and Opportunities Survey & Report in the first half of 2023, so let us know if you would like to be considered. You can also join us to present at the upcoming Fixed Income Indaba.   

 

Our press radar indicates that growth has halved in popularity, while value-oriented investing has come back into focus as it is better suited for an inflationary environment. Quality and dividend equities are also less popular among asset managers, suggesting growing concerns about their ability to deliver dividend cashflows.  

What’s more interesting is that factor investing has made a comeback on our press radar. But to what extent are UK pension funds making use of such an approach to global equities? Smart beta and quant managers often present their solutions in terms which are too technical and not directly addressing the needs and challenges of institutional investors.  

Here are two steps you can take to make sure you are approaching your audience in a more productive way: 

For more information on any of the above, please contact albena.georgieva@mallowstreet.com or your account manager at mallowstreet.