IAM Newsletter 13.01.23

Rewriting the investment playbook

Happy New Year to all our readers and we welcome you to 2023 with the relaunch of the IAM newsletter.
As the world’s largest asset manager BlackRock stated at the start of this year, we are entering a "new regime of greater economic and market volatility" which is set to stay.
JPMorgan meanwhile expects "sluggish" global economic growth of 1.6 per cent, and that dire returns from the S&P 500 in 2022 will likely return in the first half of this year.
This, BlackRock says, means writing a "new investment playbook", but just how each organisation chooses to approach this task remains to be seen.
For Louis Hutchings, investment analyst at Nedgroup Investments, the long-shunned government bond may play a more prominent role in investor portfolios this year.
In an opinion piece for IAM, Hutchings argues that with the UK and Europe in a recession, and with the US possibly about to follow, we are possibly right on the brink of a period of stagflation.
This Hasting says is just the right economic conditions – especially when central banks are forced to hold rates steady out of fear of "choking already lacklustre demand" – that inflation linked bonds look attractive.
"In such an environment," Hutchings says "inflation-linked bonds would be very much in vogue."
The challenging economic environment is also a theme explored by Don Steinbrugge, Agecroft Partner’s founder and CEO, in his forecast for 2023.
Steinbrugge says the return to high interest rates – and a move into recession - will see investors and managers redefining risk. But - as any good hedge fund manager will always say - the increased market volatility means a greater opportunity for alpha and for active managers to outperform their passive counterparts.
Also from the hedge fund world, our inaugural newsletter includes comment from Joshua Maxey, co-founder of Third Bridge.
In his analysis, Maxey argues that hedge funds have become highly sophisticated in their use of research yet still face challenges in accessing incisive, differentiated and actionable insights.
The response, Maxey says, is innovation and a flight to quality, which has ramifications for smaller players in the hedge fund space.
Finally, in this issue we hear from Jason Proctor, founder and managing director of Truffle Private Markets, who talks about how his sector is becoming more accessible to wealth managers, family offices and smaller institutional investors.
In an interview with IAM managing editor Beverly Chandler, Proctor explains how Truffle is part of an "ecosystem" which is broadening access to smaller investors, but he argues his company offers something different.
Gill Wadsworth, Editor

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