MONTRÉAL, June 13, 2017 /CNW Telbec/ - Faced with ongoing challenges in the current investment environment, institutional investors must place more importance on political risks, according to a group of leading geopolitical and financial experts speaking on Monday June 12 at the fifth edition of the International Pension Conference of Montréal (IPCM).
After years of increased international cooperation and correlated markets, Lisa Emsbo-Mattingly, Director of Asset Allocation Research at Fidelity Investments, believes the appetite for globalization has peaked and investors may be ignoring the risks ahead.
"Market volatility has remained low despite the significant increase in political risk over the past two years," said Lisa Emsbo-Mattingly. "In fact, the gap between political uncertainty and market volatility is the widest it has been since 2000."
Philip Stevens, Chief Political Commentator for the Financial Times, sees three major trends that will shape the world over the coming years: a continued decline in the United States' global influence, China's determination to become a superpower via closer ties with Europe, and the rise of populism in developed markets.
"We are moving into a multipolar world where the United States' power is in relative decline which will lead to a more unstable environment," said Marko Papic, Senior Vice President, Geopolitical Strategy at BCA Research. "Already the number of conflicts occurring today in the world is already the highest it has been since 2010."
Jean Raby, Chief Executive Officer of Natixis Global Asset Management, mentioned that when dealing with geopolitical risks, "It is extremely difficult to gauge political outcomes. Even when you predict the correct outcome, you might anticipate the wrong consequence."
Paul Podolsky, Partner with Bridgewater Associates, is concerned with the global wave of populism and the tremendous liquidity in markets, something that has not occurred since the late 1920s, when these trends led to unexpected changes in policy.
In a challenging investment environment with low inflation, low interest rates and high asset values, Henri-Paul Rousseau, Vice-Chairman, Power Corporation of Canada and Power Financial Corporation, said it would be a mistake not to take geopolitical risks into account when considering future investments. "While markets have historically been resilient to political shocks, it might no longer be the case in the current environment where geopolitical risks might have a greater impact on investment returns than in the past," he said.
Taking place at Montreal's Hotel Bonaventure under the auspices of the Conference of Montréal, the IPCM advances the debate on pension issues and solutions around the world. It is a unique opportunity for policy makers, political advisers financial experts, actuaries and pension plan administrators to meet and exchanges ideas. To view the IPCM program, please click here.
About Finance Montréal
Finance Montréal, Québec's financial cluster, was created in 2010 by institutions in the financial services industry at the invitation of the Québec Government. Finance Montréal brings together 24 Governor Members, 6 Partner Members, 12 Associate Members and close to 300 volunteer professionals. Its mission is to develop and promote Québec's financial services industry. The organization works to enhance Montréal's reputation as world-class financial hub and engages in international business development activities to attract foreign firms in Montréal by promoting various fiscal incentives including the IFC tax credit. Finance Montréal fosters cooperation among a vast range of institutions to stimulate the industry's growth while raising awareness of the financial specializations found in Montréal. To learn more about Finance Montréal, visit www.finance-montreal.com.
About la Caisse de dépôt et placement du Québec
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2016, it held $270.7 billion in net assets. As one of Canada's leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure and real estate. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.
About Power Financial Corporation
Power Financial Corporation is a diversified management and holding company that has interests, directly or indirectly, in companies in the financial services sector in Canada, the United States and Europe. It also has diversified investments in industrial companies based in Europe. Power Financial Corporation is a member of the Power Corporation Group of Companies. To learn more, visit www.powerfinancial.com.
About the International Economic Forum of the Americas - Conference of Montréal:
The Conference of Montréal is a world-class event that invites leaders from the political and academic communities, public and private sectors and civil society to speak on major issues in the globalization of economies, with a focus on relations between the Americas and the other continents.
Created in 1995, the Conference of Montréal is presented every year by the International Economic Forum of the Americas, which is also presenting the Toronto Global Forum from October 30, 31 and November 1, 2017, the Conference of Paris on December 7 and 8, 2017 and the Miami World Strategic Forum from April 16-17, 2018.
SOURCE Finances Montréal
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