The goal of the research was to drill deeply into the evolving forces in the industry and present a plausible picture of its future landscape, through both near-term and longer-term trends.
Our time horizon looked out towards 2020. We, however, acknowledge the considerable difficulties with longer-range forecasting given the increasing pace of change.
There is one word that captures the flavour of the next few years in the financial industry – complexity.
US investors have increased their sophistication in real estate investing – more private real estate, a greater risk appetite and use of synthetic investment tools. Rob Kochis and Christopher Lennon report.
The unwinding of several high profile infrastructure funds in the recent past has prompted questions as to the performance of infrastructure assets/investments and the impact of the current credit markets, on the outlook for the sector.
Mercer remains positive on the long-term fundamentals for the infrastructure sector, especially in the emerging markets. Moreover, we believe that the credit crunch will likely provide the catalyst for differentiating between the capable and less capable managers.
This article examines the performance of infrastructure in the context of the state of today’s credit markets.
Over the last several years, institutional investors have more than doubled their allocation, to over $110 billion, to financial products whose returns are linked to those of commodity indices.
Commodities may be attractive due to the low correlation between the returns of commodities and those of other asset classes, the high correlation of commodities returns with unexpected inflation, or the rising demand for commodities from fast growing emerging markets countries, such as China and India.
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How do current market activities, regulatory changes and dislocations potentially impact the ability of hedge funds to prosper going forward? The huge changes occurring in the markets are having a significant impact on hedge funds, including short sale restrictions, disclosure requirements and the effective elimination of the investment banking model and its attendant impact on sources of funds to provide leverage and liquidity.
Current and potential hedge fund investors should be aware of changes in the market and should monitor investments closely, including asking additional questions of their hedge fund managers and gathering vital market and regulatory information. Fiduciaries should not take a “wait and see” approach, but should pursue key information in order to make prudent decisions.
Over the last 12 months global financial markets have undergone major corrections following, fundamentally, a break-down in the confidence and trust in the financial system as practiced by the Western world.
Along with this break-down we experienced a steep fall in US housing prices, the nationalization of financial institutions, the forced merger and/or failure of several large financial institutions in the US and Europe, and a global credit freeze.
The crisis has led us into an economic recession.