Top asset management giants' investment strategy for 2025: layout of infrastructure, AI supply chain, and private equity.

Some of the world's largest investors are preparing for a potentially lucrative but also potentially embarrassing year in 2025. With many conflicts on the verge of peace or escalation and frequent global tariff policies, Bloomberg interviewed executives managing $2 trillion in assets to inquire about their investment strategies for the coming year. These interviewees believe that opportunities exist in real estate, AI supply chains, and private equity. Here are key points from interviews with executives from various institutions: GIC (Government of Singapore Investment Corporation): GIC manages around $880 billion in assets. Jeffrey Jaensubhakij, Chief Investment Officer of the Singapore sovereign wealth fund, stated that the company likes markets where capital has been consistently scarce. He added, "Unfortunately, as the markets rallied this year, heightened investor sentiment has led to flows into numerous sectors squeezing returns." GIC CEO Lim Chow Kiat stated that there are still profit opportunities in the European real estate market as fewer buyers are willing to enter the market after valuations dropped. He mentioned that some investment themes remain attractive year after year, especially in the infrastructure sector. He noted, "More work needs to be done from the supply side of projects and assets." This suggests that if more investable projects emerge in the market, investors would be willing to buy in. Lim Chow Kiat said, "To some extent, investors are better prepared than the suppliers of these assets, especially brownfield assets, which are more suitable for financial investors to take over and release capital from the government or other owners." He listed energy infrastructure as a key investment target, stating, "Therefore, infrastructure will be our continued focus for the next 12 months." China Asset Management: China Asset Management manages about $356 billion in assets. While many investors are concerned that President Trump's trade war will further impact China's economic performance, Richard Pan, Chief Investment Officer of China Asset Management Global Capital Investments, believes it presents opportunities. Richard Pan pointed out that Trump's first-term tariff measures had little impact on China's trade surplus, and the US chip restrictions instead promoted domestic industry development. He stated that while Trump's "America First" policy had made investors optimistic about US stocks, US equity valuations were too high, while Chinese asset valuations were nearing historical lows, showing "significant investment value," especially in the context of low bond yields. Richard Pan said, "Given all the uncertainties, I prefer to invest in markets with relatively lower valuations." He stated that the stock market value in China is still relatively low compared to the economic scale. He added that local technology companies like DeepSee and Yu Shu are also showing China's transformation from low-end manufacturing to self-innovation, partly due to China's large STEM talent pool. To seize this potential trend, Richard Pan is focusing on high-dividend stocks such as bank stocks and is bullish on leading companies in the domestic battery and home appliance industries, which also have competitiveness in the global market. Partners Group: Swiss alternative asset management company Partners Group manages about $152 billion in assets. Steffen Meister, Executive Chairman of the company's board, believes that the most realistic investment areas in the coming year will be industries focused on the domestic market, such as contract manufacturers producing drugs for the local market. While Partners Group, like many global investors, has heavily invested in data centers, they are now more focused on companies benefiting from data growth. This includes companies checking electricity grid equipment and manufacturers producing GPU connectors for speeding up data transmission. This is crucial for AI developers since training AI models requires significant computing power. He said, "The biggest challenge is that if the system crashes, even an hour of downtime could turn a month's revenue into nothing." However, despite the rapid transformation in the AI field, every company needs to evaluate its impact. Steffen Meister believes that some promising AI sectors are still too high-risk and unsuitable for investors like Partners Group. For example, the company has studied many AI-driven drug development companies a significant theme in the pharmaceutical industry but ultimately found that such investments are better suited for venture capital firms. Future Fund: Australia's sovereign wealth fund, Future Fund, with assets under management of around $150 billion, is leaning towards domestic investments. Raphael Arndt, the company's CEO, sees opportunities in the private credit sector for small and medium-sized enterprises in Australia. Future Fund's investment mandate was recently updated to require more consideration of investments in national priorities such as housing, energy, and infrastructure projects. Raphael Arndt stated that he sees many opportunities in the infrastructure sector, including domestic energy networks. He said, "We see a need for funding in airports, data centers, and the entire energy system whether it's for growth, phasing out old assets, or preparing for the transition to a low-carbon economy. We find interesting opportunities here because funding is relatively scarce." Pictet Wealth Management: The Swiss company manages around $315 billion in assets. Cesar Ruiz, Chief Investment Officer of the company, believes that 2...In 2025, which is full of risks and opportunities, it is described as a "snake ladder year". In this year, careful management and timing selection will play a huge role.Many economists are concerned that the Trump administration's tariff policies will trigger inflationary shocks. However, Cesar Ruiz believes that the market will continue to grow. He expects the US stock market to remain strong in the first half of this year, enabling investors to obtain stable returns. He also compares the new Treasury Secretary, Scott Bessent, to former Fed Chairman Ben Bernanke during the global financial crisis, saying, "Bernanke served in the right position at the right time. I have the same opinion of Bessent." Cesar Ruiz predicts that there will be large-scale consolidation among mid-sized financial companies in the United States, making acquiring companies' stocks an attractive investment. In addition, with Trump reducing regulations, IPOs and M&A deals will increase significantly, providing good investment opportunities for investment banks and potential merger targets. He said, "This year is a year in which alternative investments shine. The private equity market has underperformed in the past two years, but currently a major investment bank is preparing for 400 IPOs." "So I am willing to redeploy funds and take some risks in the private equity field." Aware Super: Aware Super manages approximately $190 billion in assets. Damian Graham, the chief investment officer of this Australian retirement fund, is looking into private equity and expects an improvement in transaction volume in this area. He said, "I believe most people would expect that 2025 will be a more active year for private equity exits." Damian Graham is also shifting his focus to real estate, noting that new opportunities for office investments are emerging. He added that most global pension funds and institutional investors have significant investments in office and retail markets, and they are not "natural buyers." Damian Graham said, "We are obviously in the opposite position. Our exposure to these industries is low, so we have more opportunities to focus on them if we want to."