After a year of violent market swings, investors such as New Zealand Super expect more liquidity stress next year and are preparing accordingly.
Top executives at the two big public investment funds reflect on their institutions’ approaches to stress testing and private markets, among other things.
The de facto central bank plans to increase the liquidity level in its portfolio. Experts say this could mean cutting its alternative asset exposure while raising its allocation to bonds.
Regional governments are weighing all funding options to offset falling economies. But few look likely to draw down on sovereign fund assets – for now.
Implementing best practices for liquidity management is proving challenging for some asset managers, as concerns mount about the potential for a squeeze in fixed income markets.
The sovereign wealth fund was among those taking part in the Asian Investment Summit, as panelists discussed screening for liquidity against different investment horizons.
Lauren Oakes of Goldman Sachs Asset Management spoke to AsianInvestor about the top-line findings from this year's Asia-Pacific liquidity survey.
The main focus in early 2017 will be on the US, but may soon shift to concerns about Europe. Meanwhile, portfolio strategies are still being driven by ultra-low yields and high uncertainty.
Asset owners are adapting investment strategies to more constrained markets, according to Aima and State Street research and executives from Goldman Sachs Asset Management and JP Morgan.
Fund managers say the global hunt for yield is exacerbating the liquidity problems in Asian bond markets and have their doubts about how the issue can be resolved.
European and US investors see themselves as viable sources of corporate bond liquidity, and proposals are emerging whereby dealers could access buy-side holdings, says Greenwich Associates.
The reduction of secondary market liquidity in bond markets has changed attitudes about managing assets.