PGIM held its fifth annual EMEA Investor Forum in London on November 19, 2024. During the day, we discussed many investment themes and ideas that are top-of-mind for CIOs and experienced investment professionals. PGIM’s CEO David Hunt shared his top three themes for 2025. We heard about the changing economic landscape from Katharine Neiss –Deputy Head of Global Economics and Chief European Economist at PGIM Fixed Income, and Peter Hayes, Global Head of Investment Research at PGIM Real Estate. Ibtissem Sfaxi – Head of EMEA Business Development, PGIM Real Estate, dissected the latest trends in private alternatives in her conversation with some PGIM specialists. Eugenia Jackson – Global Head of ESG, PGIM, explored the hot-button topic of engagement in the investment process. Finally, a panel of leading CIOs from Brightwell, Pension Protection Fund and Local Pensions Partnership Investments shared their perspectives on various topics.
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Threading the Needle: Navigating Today's Macroeconomic Environment The global economy is transitioning to an environment with higher interest rates, elevated public debt, and increased geopolitical risks. The panel discusses how investors can successfully navigate this complex macroeconomic environment. Will Europe have the fiscal space and political will to enact changes to protect itself from the rising tide of trade protectionism?
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Three Emerging Themes in 2025 & CIO Vantage Point: Panel Discussion PGIM Chairman David Hunt, introduces his three emerging themes for 2025 before inviting a distinguished panel of CIOs to discuss their insights on next year’s themes; how can the UK pension industry support the new government’s growth objectives and what are some of the opportunities and challenges for the broader industry.
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EMEA Research: The Rise and Rise of Private Markets The flow of institutional funds into private alternatives has been larger than at any previous time in history. We see this trend accelerating as investors value the income-generating properties and the diversification benefits of this asset class. A research study of 250 institutional investment decision-makers at institutions in Europe and the Middle East, found that more than 75% of the survey respondents anticipate taking on more risk over the next two years. The panel unpacks the drivers, opportunities and headwinds among various categories of private alternatives.
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Global Research: Redefining Risk in an Increasingly Turbulent World The present environment of heightened geopolitical uncertainty highlights a turbulent period for the global economy. PGIM surveyed 400 institutional investors , representing approximately $9 trillion of assets under management, to find out how they forecast and mitigate risk in their portfolios. The panel explores key insights from the study and discusses potential investment opportunities arising from governments' industrial policies.
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Great Expectations: Is Engagement Living Up to its Promise? Trust-based, informed dialogue between investors and investees is integral to identifying risks and pursuing positive investment outcomes over different time horizons. However, there is a growing realisation that engagement for positive sustainability outcomes does not meet its proponents' expectations. The panel discusses whether an engagement expectation gap is emerging.
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Navigating the Securitised Landscape: Uncovering Opportunities Today and Beyond The global securitised market is worth around $5 trillion and influences many areas of the broader economy, ranging from consumer loans to residential real estate. The asset class is seeing a resurgence as fixed-income investors look to diversify beyond traditional corporate credit holdings.
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Castles in the Cloud: How Infrastructure Lies at the Heart of the AI Revolution We are in the midst of an AI-driven investment cycle transforming the technology sector and the global economy. However, the increased adoption of AI is not without its challenges. The panel unpacks the current AI ecosystem and explores the implications of its future development on investment opportunities.
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Trading Off: The Energy Transition's Hard Truths The energy transition is transforming the global economy, and the new forces are creating a set of winners and losers. Three themes are a recurring motif in the evolving energy landscape: 1) having a dependable and affordable supply of energy supply is essential for countries, 2) electricity generation from renewable energy resources is growing at a staggering rate, and 3) reliance on fossil fuels will continue for decades. The panel considers how the energy transition is proceeding at different paces in different places.
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What's Your End Game? The Implications of a Surging Pension Risk Transfer Market The current higher-for-longer interest rate environment means improved funding ratios for global pensions, leading to a booming pension risk transfer market globally. The evolving funded status picture for pension funds brings a different set of challenges, opportunities, and decisions for CIOs. The panel discusses the latest trends.
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Quick Take: 6 key insights from the 2024
At the 2024 EMEA Investment Forum in London, PGIM hosted an afternoon of discussion, debate, and peer-to-peer networking to help investors assess the market outlook, explore the geopolitical forces reshaping the economy, and identify emerging opportunities across public and private markets. Below are our six key insights from the day:
- 1. EMERGING THEMES IN 2025
- 2. THREADING THE NEEDLE
- 3. REDEFINING RISK
Top Themes for 2025 and Opportunities in the UK
“The last 18 months have seen the biggest rotation of capital I can remember.” David Hunt, President & CEO, PGIM
The top three themes for 2025 in CIOs’ minds are the great rotation of capital, political outcomes, and geopolitical risks.
Capital Shifts: CIOs remain overweight on the U.S. economy due to the resilience of the labour markets and robust corporate profitability. Japan has been the biggest beneficiary of heightened U.S.-China trade tensions and an improving economic outlook. Indonesia and Vietnam are seen as attractive capital destinations as investors reassess the outcome of realigning supply chains. However, the ease of accessing capital markets in developed economies compared to their emerging market counterparts remains crucial for investment allocations. On the other hand, there is little appetite for fresh investments in core Europe, with investors also staying away from China. However, stimulus packages might rekindle investor interest in the latter.
Political Changes: The great year for democracy has proved to be a rough one for incumbents. However, the biggest loser is the government's balance sheet. Fiscal responsibility has taken a backseat, with political parties in many countries preferring to stay silent on this important subject. For example, the UK's average issuance of government debt has jumped to around £260 billion annually, compared to £50 billion before 2008. While central banks can control short-term policy rates, investors are growing concerned about the longer end of the government bond markets due to the deluge of supply, leading to steeper yield curves.
Geopolitical Risks: Geopolitical risks are growing worldwide, and that is the No. 1 risk for investors. For example, the America first policy in the U.S. is changing the conventional world order and leading to a more unpredictable investing environment. CIOs are preoccupied with making portfolios resilient and diversifying investments in a world of increasing trade frictions. Investors are increasingly testing the impact of different scenarios on their portfolios to reduce the downside risks.
- 4. ENGAGEMENT
- 5. PRIVATE MARKETS
- 6. SECURITISED LANDSCAPE
How can ESG engagement make a difference?
“Less is often more. Don’t spread yourselves too thinly. But to achieve real results or expectations is to go narrow and deep.” Ian Burger, Head of Stewardship and Integration, Universities Superannuation Scheme.
Engagement is an important tool in investors’ toolboxes to drive shareholder value. However, there is growing pressure on investors to spend more time engaging with companies to address different issues. That has also resulted in some frustration because the pace of change arising from increased engagement has lagged expectations.
For engagement to be successful, it has to be a win-win situation for companies and investors. Stakeholders must be unified around the common goal of improving business decisions and investment performance. Engagement often breaks down when there is a misalignment between investor and corporate interests. For example, the engagement goal of the Paris Climate Accords alignment by 2050 may be too ambitious if targeted companies see certain engagement expectations as economically unviable in the context of current government policies.
Investors also need to understand issues that can be addressed at the corporate and broader systemic levels. They should recognize and be transparent about the limitations of engagement in the investment process.
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