Our 2025 annual outlook summarises our views and insights on the key questions impacting our portfolios today.
2024 was a fairly benign year overall as investors continued to experience an extension of the themes of 2023. Portfolio returns were strong with positive contributions from all asset classes. Our standouts this year were equities (unsurprisingly, as the S&P 500 notched up a second year in a row of 20%+ gains) and our absolute return strategies led by our multi-strategy hedge funds and insurance-linked investments. Private equity was modestly positive overall, but was hindered by a lack of exits and low deal volumes.
As we enter 2025, our outlook is broadly positive. The odds of recession seem very low. Pro-growth policies are at the forefront of the new US government’s agenda. A key concern remains the difficulty in getting inflation down to target without negatively impacting growth and materially slowing economies. It looks to us like inflation will have to be tolerated in order to keep growth high.
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