JP Morgan Asset Management forecasts “rich environment” for hedge funds as ‘megatrends’ take centre-stage
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By Hugh Leask | 20/01/2021 - 11:17am
The fallout from the coronavirus pandemic is set to unlock global “megatrends” this year, including consumer and corporate technology, healthcare, and sustainability themes – and hedge fund investors can expect a “rich environment for growth”, a major new study by JP Morgan Asset Management suggests.
The firm’s 2021 Global Alternative Outlook also predicts a rebound in equity market fundamentals as economies recover from the Covid crisis, as well as continued momentum in special purpose acquisition vehicles (SPACs), which have seen a surge in activity among several high-profile, brand name hedge funds over the past year.
Investors have been flocking to hedge funds, an area of alternative investing viewed as a volatility dampener and portfolio diversifier, as markets move toward a post-pandemic world, according to JPMorgan Chase & Co.
J.P. Morgan Asset Management saw record capital flowing into its hedge funds during the last two weeks of 2020 and into the first half of January, according to Anton Pil, the global head of the bank’s alternative investing arm. Investors are viewing hedge funds as a counterweight to stretched valuations in equities, embracing them as a diversification strategy on the expectation that they will produce more yield than fixed income, Pil said in a phone interview.
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NEW YORK, Jan. 19, 2021 /PRNewswire/ J.P. Morgan Asset Management today released its third annual Global Alternatives Outlook, providing a 12-to-18 month outlook across key alternative asset classes and highlighting the views of the CEOs, CIOs and strategists from the firm s 14 distinct alternatives investment engines.
The report assesses the impact of a COVID-19 impacted year on the investment landscape, and assesses opportunities across alternatives in 2021 as investors continue to shift their focus from public to private markets in the search for alpha, yield and diversification. After the unprecedented events of 2020 and the ensuing economic recovery, jump-started by swift central bank action and fiscal stimulus, investors continue to hunt for yield to take advantage of underlying consumer strength and resilient fundamentals across global economies, said Anton Pil, Head of Alternatives, J.P. Morgan Asset Management. In this envi