Young Professionals: Daniël Asselbergs (APG AM)
This special was originally written in Dutch. This is an English translation.
The world in which investors operate has become more complex and unpredictable in a short period of time. Geopolitical tensions, technological developments and structural transitions are increasingly setting the agenda. Financial Investigator asked young professional Daniël Asselbergs, Investment & Portfolio Management Trainee at APG Asset Management, how he experiences these developments in his daily work.
By Daan Nijssen
Which geopolitically driven themes and risks do you think deserve extra attention in pension and asset management?
‘Historically, geopolitical crises have not usually had a negative impact on long-term returns. In the past, markets have usually been able to absorb geopolitical shocks. Underlying drivers such as economic growth, profitability and interest rate policy ultimately drive the market. As long as those fundamentals remain intact, the market remains optimistic. This is currently also reflected in the bond market, which is important for the pension sector. Even the riskier emerging markets are showing historically low risk premiums, which indicates a willingness to take risks.
In the past, markets have generally been able to absorb geopolitical shocks.
In my opinion, what deserves attention is not so much which geopolitical event occurs, but whether the countries involved play an important role on the world stage, whether the portfolio is highly exposed and whether developments could be structural in nature. For Dutch pension funds, this consideration becomes relevant when policy choices made by major economies could influence financial markets. It is precisely then that asset managers need to pay extra attention to liquidity and risk management. Dutch funds have considerable international exposure and have expanded their illiquid positions. Listed investments generally remain liquid, but in a changing market environment it may be desirable to reassess assumptions and risks. Liquidity plays a greater role in private investments, which means that your return requirements increase, you take measures to ensure alternative options and you seek greater diversification.’
Read the original special in Financial Investigator magazine