The top fears of insto investors in 2024
Natixis Investment Managers (IM) has revealed the biggest economic threats to Australian institutional investors next year, with 45 per cent describing recession as “inevitable” in 2024.
The asset manager’s survey of 500 institutional investors across 27 countries, including Australia, has discovered the top issues set to impact the investment landscape.
The growing influence of geopolitical bad actors was identified as the most pressing threat, with 50 per cent of Australians noting this issue.
Half of investors were also concerned about rising interest rates, followed by 46 per cent saying a decline in consumer spending.
Over 40 per cent of Australian respondents pinpointed the impact of China’s economy as a threat in 2024. However, this figure was lower for global investors at 30 per cent.
Finally, relations with China were an economic concern for 32 per cent of Australian institutional investors.
“Confronted with global conflicts, high inflation and continual rate rises this year, Australian institutional investors have had a lot to deal with – unfortunately it looks like 2024 will also be filled with challenges,” said Louise Watson, Natixis IM country head for Australia and New Zealand.
Geopolitical forces and macroeconomic uncertainty will continue weighing on global markets in the new year, Watson expects, underscoring the need to build resilient and diverse investment portfolios.
The growth of private investment
Natixis IM’s market projections found that institutional investors in Australia have a bullish outlook on only two asset classes: the bond market (69 per cent) and private debt (73 per cent).
Private assets, more broadly, are a top alternative allocation choice for institutional investors, the asset manager stated.
“However, after a long run of private investments, 59 per cent of institutional investors say that the popularity of private assets is making it hard to find deals,” the report wrote.
Regulation is also impacting investors’ sentiment towards private assets. Some 53 per cent of respondents believe over-regulation of private markets make them less attractive.
“However, based on their plans for 2024, it appears this is about easing up future allocations rather than dialling back on what they already own.”
AUTHOR
Jasmine Siljic
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