From Institutional Investor, March 11:
Wilshire’s Mark Perry says deglobalization, energy, and technology security are secular trends being reinforced by the rapid changes to the geopolitical landscape.
Infrastructure is one sector that may benefit from the upheaval in geopolitics.
Current discussions about geopolitics among allocators center largely around risk — how it’s shifting market narratives and driving trends like reshoring, deglobalization, and security concerns. Yet these challenges are also creating opportunities, particularly in infrastructure, according to Mark Perry, Wilshire’s head of alternatives manager research.
“We’re spending a lot of our time in the infrastructure market today,” Perry told Institutional Investor. “We think it’s a really interesting market in transition, and these same risks to the equity markets are tailwinds to infrastructure.” Perry cited reshoring and energy security as factors that are driving capital flows into the infrastructure market all “on the back of some of the geopolitical concerns that we’re seeing.”
When evaluating the impact on private assets, Perry emphasized that while high-frequency news dominates the landscape, the focus should be on filtering out the noise to identify meaningful investment implications.“What we’re looking for in geopolitics are changes in secular trends,” he said.
Perry highlighted deglobalization, energy availability, and technology security as key secular trends being reinforced by current geopolitical discussions.
“As we look across sectors that may benefit from this new secular trend — aerospace and defense, infrastructure, energy security, certain parts of telecom — that may be in line to benefit from some of this reshoring and deglobalization trend that we’re seeing.”....
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