The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
ôIf you were to take a snapshot of the world at any given time, you would be able to identify a number of factors that are affecting global markets,ö says Maisonneuve. ôSome are noise without meaningful impact beyond their occurrence, while others are short and often violent, such as the Asian crisis or a coup somewhere in Latin America. The latter are often unpredictable and, therefore, difficult to integrate into an investment strategy."
There are also, however, medium- to long-term structural trends that unravel over a period of decades, she notes, citing the industrial revolution as one example.
ôLooking into 2008, and indeed beyond, I believe there are three key trends that investors need to consider that will have a meaningful impact on stock investing: demographics, climate change and the further integration of emerging economies such as China and India û or Chindia û into the world economy,ö she says.
One of the first things that investors need to understand is that the global landscape is changing, especially in terms of demographics, Maisonneuve says.
She offers some data to demonstrate her point. The worldÆs population is expected to rise to nine billion people from six billion by 2050, and around 98% of that growth is expected to come from emerging markets. Africa, including the Middle East, could see over 800 million people added to its population, potentially resulting in Africa having over a 35% share of the world population, while Asia would represent over 50%.
ôThe consequences of those trends are multiple in terms of job creation and level of wealth to be shared,ö she says.
Across regions, people are going to be living longer, she notes Advances in medical treatment, working conditions and diet are adding years to life expectancy and this means that a greater and increasing percentage of the worldÆs population is going to be past retirement age, she adds. Experts predict that over two billion people will be over the age of 60 in 2050. Over 60% of these people will be living in Asia.
The spread of the workforce will also change dramatically, she notes. Developed economies will represent only 12% of the global labour pool by 2050, compared to 20% now and 27% in the early 1980s, while emerging market economies will provide the majority of the workforce.
Such demographic trends will facilitate a change in global savings flows, she says. ôPension systems will be under an ever-increasing strain, which we have only started to see in some countries. Government schemes will not be able to cope. Because of this, people will be forced to save for their own future rather than relying solely on the government.ö
Wealth management and financial services firms will be significant beneficiaries of this development. Over the next 30 years, three-quarters of the worldÆs savings flow could come from emerging economies, which could not only drive consumption and commodity prices but also affect the relationship between nations globally as marginal economic power shifts, she notes.
Meanwhile, Maisonneuve says long-term opportunities for investors are numerous and can be split between companies that help mitigate the impact of global climate change and those that help adapt to changes that are, by now, inevitable. Companies that can help mitigate the impact include those involved in alternative energy, energy efficiency and innovation. The prospects for these companies are enormous, she notes. It is estimated, for instance, that the US will invest around US$20 trillion in energy infrastructure by 2030.
Finally, Maisonneuve notes that the rapid growth in emerging markets has been a key driver in the global economy and this trend will continue.
ôThe oft-used phrase æmade in ChinaÆ has never been as relevant as it is today, although the types of products made in China are no longer limited to cheap clothing and electronics,ö she says.
For investors looking to integrate these three investment themes into their portfolios, Maisonneuve suggests consumer goods and services companies, wealth management firms, infrastructure-related companies, mining stocks, energy producers, and companies involved in innovation, improving crop production and food transportation.
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