Alan Mudie, global head of investment strategy, Societe Generale Private Banking
What is the most promising area of alternative investments at the moment? How are you tapping into these themes and also managing illiquidity risks?
When we talk about alternatives and illiquidity, I think we should bear in mind debt. The overhang of debt, compared to the ability of the global economy to service and to repay that debt.
This is a structural issue that will remain with us for years, if not decades to come. So, if we did have a resurgence in inflation, I would view that as possibly good news longer term.
It would give the global economy, the ability, in nominal terms, to actually begin to grow to mitigate or compensate for the size of the debt burden that we face today. So longer-term, I think we should hope for inflation and not fear it.
In terms of diversification, I’d agree with those in my position that have mentioned gold, we still hold gold in portfolios and as shown in December, gold does trade very differently to other assets held in portfolios. We think that will hold true for the long-term.