Asia/Pacific

Asia Insights: Playing Defense

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Asian markets have had a difficult year, but while the current environment has been challenging for most investments, it has also created an opportunity for more defensive and diversifying strategies to add value. In this edition of Asia Insights, we focus on the case for Asia quality strategies within public equities; increased interest in India and Southeast Asia venture capital markets; private infrastructure and private credit as defensive strategies; and the value in Asia macro and equity long/short.

The Growing Importance of Asia Equity Long/Short

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Equity long/short investing is one of the most widely adopted strategies by hedge fund managers in Asia. Its importance has increased over time, and we believe that this strategy can play a key role within a global hedge fund portfolio. There have been several positive developments in recent years that build the case for investors to allocate to the strategy, including better market access, continued alpha opportunity, and a greater talent pool.

China Risks: Is Taiwan Next?

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Given Russia’s invasion of Ukraine, concerns that China might decide to invade Taiwan are rising. But China is not Russia, and Taiwan is not Ukraine. For China to unilaterally break the status quo and risk a failed invasion and inflict economic pain on the population would be extremely destabilizing for a party that puts domestic stability above everything else. And given the current state of the Chinese economy and China’s vulnerability to US tech sanctions and the USD banking system, China is unlikely to invade Taiwan any time soon.

2022 New Zealand Outlook: Balancing the Pivot

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New Zealand’s COVID-19 containment strategy served the economy well during the early days of the pandemic. However, New Zealand equities and bonds suffered in 2021 as growth slowed to a halt late in the year due to lockdown measures and inflation moved higher due to labour market constraints. Heading into 2022, New Zealand authorities have pivoted the strategy from zero–COVID-19 to minimisation and protection, while still embarking on a monetary policy tightening cycle. Balancing both strategies will be key to supporting New Zealand’s economic growth in 2022.