2Q 2024 Strategic Investment Outlook

Private Asset Fundraising has Slowed... and Other Flow Observations

In this quarterly paper we look at recent flow activity across asset classes discussing which aspects of these trends seem set to persist and what this means for asset allocation.

The strategic allocation question that comes up the most still relates to private assets. There ha s been a slow down in private asset fund raising, which has been more pronounced for equity than debt. More investors also say they are now overweight private equity , so while we think the allocation to private assets will continue to rise, we suggest that the marginal dollar should head to debt.

Risk asset inflows have continued, but they are very concentrated e. g. into the US and Asia in equities and from a sector perspective into tech. Within fixed income, investment grade debt has dominated. Sentiment metrics remain elevated but do not seem high enough by themselves to indicate a tactical reversal. Strategically we think inflows into risk assets need to continue.

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