May edition: 2023 Mid-Year Economic Outlook, opportunities in private debt and get to know Amit Popat.

2023 Mid-Year Economic Outlook: Global resilience but regional divergence

The global economy is slowing but remains resilient and global inflation rates are falling, but perhaps not fast enough. Broadly, central banks are pausing and assessing. Economic growth, inflation and policy dynamics are regionally divergent. Equity and bond markets are doing well in 2023 despite high macro and asset volatility.

Discover our views on:

Growth: resilience has been underpinned by strong balance sheets, reopening China and falling energy prices. What happens next? How does tight monetary policy and reduced bank lending impact the global economy?

Inflation: disinflation continues, but tight labor markets support inflation via elevated wage growth. Is inflation coming back down to central bank targets?

Central banks: have they done enough and what’s next?

Markets: where should investors turn to in uncertain times; is fixed income more appealing in a world of higher interest rates?

Register for our webinar on June 14 at 3:00 BST | 10am ET with Rupert Watson, Mercer’s Head of European Asset Allocation, and Rachel Volynsky, CIO of Mercer Investment Solutions Canada, as they discuss the mid-year outlook in detail. When you register, you’ll have the opportunity to submit your questions in advance. 

Private debt: Aligning investment needs with the means to deliver

“Many other asset classes look unattractive at this point in time, whereas private debt looks more attractive from both a risk and return perspective." Joe Abrams, Head of Private Debt, Europe, Mercer

Uncertainty in market expectations presents a conundrum for institutional investors. Prospects of near-term volatility are baked into allocations, while doubts surrounding market conditions, inflation, Russia-Ukraine conflict, and wider macro-outlook create a need to limit potential downside risk while taking advantage of dynamic asset allocations.

In an environment where future return expectations for most asset classes are much lower than returns in recent years, the private debt space could present investors with the potential to limit concentration risk, diversify exposures while leaning into areas expected to benefit from volatility. However, with default rates anticipated to rise, it is more important than ever to construct portfolios appropriately, ensuring asset classes can be accessed and leveraged to meet long-term investment needs.

For investors eyeing the $1.3* trillion asset class, the ability to sculpt strategies around risk, ESG and geographies may present an opportunity to deliver on investment goals.

“As the lines of public and private debt continue to converge, and distinctions between the two become blurred, it is important to revisit the unique merits of the private space given ongoing market volatility." David Scopelliti, Global Head of Private Debt, Mercer.

*Source: Preqin, McKinsey & Company Global Private Markets Review, March 2023.

Join the MercerInsight® community to get the full paper on private debt and for more timely investment insights, innovations and ideas from our research teams and hundreds of third-party publishers and asset managers.

Charting the course in Private Debt

In this episode of critical thinking, critical issues, Mercer's Global Head of Private Debt, David Scopelliti is joined by Joe Abrams, Head of Private Debt, Europe, and Tamsin Coleman, Deputy Head of Private Debt, Europe to explore the current Private Debt landscape. They discuss market evolution and volatility and share insights into portfolio building and considerations for manager selection. Stay tuned to the end for rapid-fire surprise questions from David. 

This month, we’re introducing Amit Popat. As our Global Head of Financial Institutions, Amit is responsible for the development and execution of Mercer’s strategy to engage and grow our investment services and solutions across a range of financial institutions and intermediaries including Insurance companies, Wealth Managers/Private banks and Family Offices.

Amit regularly speaks at conferences and was recently interviewed by Citywire to discuss the importance in sourcing high-quality managers and how it can potentially deliver greater returns.

Outside of work, Amit actively supports the New Ways Charity which aims to promote human development in some of the poorest and most neglected parts of the world by supporting projects (nutrition, health, education, & water resources) that enable local communities to take responsibility for their own lives.

Amit is based in London, has three children and spends his spare time with family playing sports or travelling. He also enjoys reading, films and cooking.

Connect with Amit on LinkedIn and “ring his bell” to keep up with his content and insights.

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