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.