Meister warns that this only works for firms that anticipated the turmoil. Partners Group has pushed out refinancing until 2025 and hedged much of their rates exposure, he said. The fallout from the UK’s recent volatility in the pound and gilts would help boost other opportunities.
“It’s a very human thing when you look at the public markets where people are biased by the immediate reaction,” he said, with near-shoring -- moving far-flung operations to countries closer to home -- among the investment opportunities he sees in the UK. “The last two years you were really concerned and now I think you can relax a bit more.”
Longer term thematics such as aging populations are also a good sources of deals, Meister added. This could mean housing or residential apartments built for rent with affordability and inclusion becoming a major topic. Other investment ideas include logistics, cold storage and pharmaceutical storage.
Temasek Holdings S$403 billion ($295 billion)
Temasek International’s Chief Investment Officer Rohit Sipahimalani cited investment themes such as sustainable living, growing consumption, longer lifespans and healthcare.
But where Meister feels now is the time to make deals, Temasek is slowing the pace of investments. One focus is on helping companies in its portfolio survive the impending economic downturn and use it to expand and “strengthen their positions” over the coming year, he said. For new deals, the investment giant will be more selective.
“We’re cautious because we don’t think valuations fully reflect the downside we expect over the next 12 months,” he said. “The reason we’ve slowed down is because of the valuation environment -- there’ll be better opportunities down the line.”
China Asset Management 1.79 trillion yuan ($253 billion)
Despite steep declines this year, China’s A-share stock market remains a better option than US, European or Hong Kong equity markets, according to Richard Pan, Chief Investment Officer of global capital investment at Beijing-based China Asset Management.
The Federal Reserve still has to hike interest rates to bring down inflation as the US continues to head toward a recession, Pan said. This threatens to fuel outflows from markets like Hong Kong, while Europe is in a worse situation, grappling with the energy crisis and debt issues.
“China is a rare place where the government is still in a loosening cycle,” providing ample liquidity, said Pan. “The yuan has also remained stable against a basket of currencies despite depreciation against the strengthening dollar.”
China Asset Management sees opportunities in both new energy and fossil fuels due to the huge demand in the coming decade, and likes healthcare and medical equipment stocks, he said. The company also favors consumer stocks as consumption will normalize, sooner or later, especially high-end players like luxury shopping malls that have seen sales climb even as economic growth cooled. Pan said concerns that China may backpedal on its opening up policy are misplaced, even as Covid surges have stoked concerns.
“The pandemic is a once-in-a-century rare situation and should not be seen as normal,” he said. “People shouldn’t be excessively pessimistic about China’s economy.”
--With assistance from Abhishek Vishnoi and Sarah Wells.
This article was provided by Bloomberg News.