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Geopolitical Investing

Business executives and investors make decisions in a world rife with geopolitical risks. Taking the form of populism or protectionism, collective backlashes against globalisation are becoming increasingly prevalent—unsettling G7 economies such as the UK, France and Italy, as well as emerging economies, such as Brazil and India. Beyond contributing to financial uncertainty and volatility, the rise of economic nativism means that executives operate in markets that may be unreceptive to the globalisation which underpins supply chains, financing and capital.

These social undercurrents have the potential to disrupt not only day-to-day management and operations, but may also distort traditional economic models used for guiding long-term investment decisions and capital allocation. This can create both upside and downside surprises. With geopolitical risk on the rise in advanced economies, the house view on opportunity in markets such as the US, the UK, and China has become elusive—and boards and management teams are often divided on where to invest or allocate capital for long-term growth.

Our approach

Using data to analyse geopolitical risk

In our age of information, CEOs can be overwhelmed by reports, headlines and data points. When it comes to the global macroeconomic environment, the geopolitical landscape and the outlook for their sector, executives and their teams often lack a way of synthesizing this information and making it relevant to their bottom line. Which countries are red flag, green flag or yellow flag for businesses and investors as they look to their overseas portfolios?

Sector-specific framework

With our proprietary macroeconomic, geopolitical and sector-specific framework, we work with clients to adopt a prudent long-term outlook of the markets in which they operate. While companies, boards or investors may harbour a home bias, we work with executives and their teams to take an objective view of a market, backed by rigorous data and our proprietary methodology.

Expanding the investment horizon

We also adopt a rigorous cross-sector approach. For example, we are able to deploy a consumer outlook for the real estate business and leverage insight from the venture capital space on infrastructure investing and development. We can also share best practices on ESG (environmental, social, governance) criteria between the corporate world and pension fund investing.

Our services

C-suite presentations and executive dialogue and engagement

We regularly meet with C-suite executives to engage and maintain a dialogue on some of the following questions:

  • What is the current outlook for global financial markets? What does the return of volatility mean for my bottom line? How can we best prepare for the next crisis?
  • Which countries are red flag, yellow flag or green flag for investment?
  • In our current age of heightened trade conflicts, how can corporations adopt an investor mindset in terms of long-term capital allocation?
  • How can investors maintain their asset operations on the ground in geopolitically risky regions?
  • In an age of ESG, how can companies build social responsibility into their bottom line and operating strategy, rather than making it tangential to the business?

Board presentations and speaking engagements

We regularly present to boards and can be engaged for industry speaking engagements around the world.

Portfolio strategy and geographical asset allocation

At the strategy-setting level, we help provide guidance for investors and their teams as they select which geographies to invest in and which to potentially exit or consolidate. When an in-house team generates a new strategy or outlook for their global or regional approach or sector, we can provide external validation.

Guiding specific investment decisions at the deal level

In the private equity space, deal teams spend a lot of time in the micro part of the deal, but sometimes discount the macro outlook or the geopolitical landscape of a target market in their due diligence process. Our team can work with you to provide the macroeconomic and geopolitical components of a due diligence exercise—helping to guide a specific transaction—and providing a holistic lens through which to assess a transaction.

Data analytics and visualisation

In evaluating investment and capital allocation strategy and specific investment decisions, our Geopolitical Investing Index uses proprietary methodology and data analytics to provide a visually attractive and instructive dimension to guide decision-making.

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