JANUARY 13, 2025 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
Outlook Global Economy
The Trump effect is top of mind for economists
DC plans Staying the course amid uncertainty. PAGE 3
Emerging markets Managers optimistic despite headwinds. PAGE 3
Washington Policies, personnel will see change. PAGE 3
Hedge Funds Higher volatility has managers optimistic. PAGE 14
Real Estate After 2024’s troubles, a recovery beckons. PAGE 15
ESG Some managers are still fighting the fight. PAGE 16
Money Managers From geopolitics to Trump, outlook is hazy. PAGE 17
Outlook Private Equity
Private equity transactions expected to take off in 2025 Amid an uptick in deal volume, fundraising still fraught; some manager consolidation likely B y Arleen Jacobius Private equity investors contend that all systems are go, expecting transaction and exit activity to take off in 2025. Already, there are signs of a recovery. Global private equity deal count was up 12% to 8,473 in 2024 from the prior year and transaction value was up 22% to $838.5 billion, according to PitchBook’s 2024 Annual Global PE First Look, providing preliminary data. Global private equity exit value in 2024 jumped nearly 20% to $807.1 billion, while the number of exits fell 15% to 2,939 from the prior year But fundraising has been challenging, with LPs slowing commitments to new funds and waiting for their current roster of funds to return capital.
SEE PRIVATE EQUITY ON PAGE 24
SEE GLOBAL ECONOMY ON PAGE 22
Uncertainty, optimism are the main themes for 2025 B y Rob Kozlowski
After a tumultuous ’24, more change ahead. PAGE 18
For chief investment officers at large U.S. asset owners, uncertainty may be the only thing that awaits them in 2025 — but some are optimistic about growth prospects in both public and private markets. “Even with a unified Congress and presidency, things are still very uncertain,” said Angela Miller-May, chief investment officer of the $56.4 billion Illinois Municipal Retirement Fund,
For Republicans, not an immediate priority. PAGE 20
That's causing difficulties for some managers, which could result in manager consolidation, industry insiders said. “We expect private markets to remain resilient and continue recovering in 2025, supported by a favorable macro backdrop, declining interest rates, and positive RESILIENCY: Goldman investor sentiment, parSachs Asset Manageticularly post-U.S. elecment’s Michael tion,” said Michael Brandmeyer Brandmeyer, global head and chief investment officer of the external investing group at Goldman Sachs Asset Management. “However, while both investment and exit activity levels have increased, they remain below historical averages when adjusted for overall industry size.”
Top economists at some of the world’s largest money management firms took a region-by-region approach to their outlook interviews with Pensions & Investments, revealing that what happens in the U.S. under a second Trump administration is key for the rest of the world. That’s the known. The unknown and therefore huge risk is what he does with those policies and how the rest of the world responds. “The key part of thinking about the U.S. is what does Trump’s reelection mean for policy and the momentum in the U.S.,” said Karen Ward, managing director and chief market strategist for Europe, Middle East and Africa at J.P. Morgan Asset Management. At face value, it looks like a further divergence between U.S. growth and economic and market performance vs. the rest of the world. But while Donald Trump’s return to the White House looks like it means a continuation of policy and approach from his previous term in 2017 to 2021 — with deregulation, tariffs and tax cuts once again on the agenda — there’s a major factor that may change how these play out, she said. “One point I’ve been making to clients is the economy that he inherits this time is different to the one in 2016 — therefore, some of the possible policies
Outlook Asset Owners
ETFs
Retirement policy
B y Sophie Baker
Davide Bonazzi/The iSpot
A look at what 2025 has in store for:
How deregulation, tariffs and tax cuts will factor into world economies is anyone’s guess
Oak Brook. Investors still don’t know what’s going to happen, and when it’s going to happen, she said. That includes Fed independence. "Everything is being questioned,” Miller-May added. “We just follow our asset allocation policy because we try to block out the noise,” the CIO said in a Dec. 6 interview. “We do pay attention that inflation is sticky and rate cuts are still going on, but we think interest rates will stay higher for longer, and we felt that
way before the new administration.” Other CIOs echoed Miller-May's concerns. “Uncertainty is a word that we used
SOUND BITE DOL’S ALI KHAWAR: ‘The question isn’t are you pro-
ESG or anti-ESG, the question really should be are you pro or against maximizing risk-adjusted net returns?’ Page 2
quite a bit last year and will continue to use this year,” said Benjamin Cotton, CIO of the $77.4 billion Pennsylvania SEE ASSET OWNERS ON PAGE 24
Slow and steady wins the race Wellington Management is taking a long-term path to globalizing, and the plan is paying off. Page 4