Header Kapitalmarktpodium - Lupus alpha Investment Fokus

Capital markets podium

“I’m a fan of rebalancing.”


The capital markets podium provided an insight into how investors are looking ahead to 2024, the risks they see, and which asset classes they are increasing investments in now. Bernhard Grötsch, Managing Director at Rohde & Schwarz Corporate Finance, believes there is a risk that inflation will remain high if interest rates continue to rise. Dr. Michael Leinwand, Member of the Management Board of the Versorgungsanstalt des Bundes und der Länder (VBL), is focusing his attention elsewhere, explaining that “the biggest risk in 2024 will come from the real estate sector” with its high vacancy rates and financing problems. Ingo Mainert, CIO Multi Asset Europe, Allianz Global Investors, viewed the issue from an almost philosophical perspective and spoke about the incalculable uncertainty (unlike risk) within the VUKA regime (volatility, uncertainty, complexity and ambiguity).

When asked about the recession, whether it will materialise and how deep it will get, Ingo Mainert responded: “The market’s economic forecast is too optimistic. While the recession won’t be deep, it will be L-shaped.” He asserted that what Germany needs are far-reaching structural reforms and an agenda for 2030, although neither of these are in sight. As a result, Mainert believes that “we will switch to a phase of extremely low and anaemic growth”. Dr. Michael Leinwand also expressed his doubts “that we here in Europe will be able to generate significant growth over the next few years”. Dr. Götz Albert pictured himself as a character in the play “Waiting for Godot”, as “the indicators have been pointing to a recession for a year now – restrictive monetary can have an extremely delayed impact.” In any event, he is convinced that “interest rates will not fall quickly, and it would be misleading to expect this”.

But which asset classes are investors turning to? Bernhard Grötsch began with a basic statement of fact, saying: “We’re rather boring when it comes to investments: equities, bonds, currencies.” Yet the situation is not as boring as it might seem, as he adds: “I’m a fan of rebalancing”, something he has done since 2008, of all years. “We rebalanced for the first time in October 2008 – that was the first time we took the plunge – but it’s been going well since then.” He currently tends to prefer inflation-linked bonds in addition to equities. For Dr. Michael Leinwand, the increase in interest rates has made fixed-income investments relevant once again in this context due to their variable interest coupon, as well as collateralised loan obligations (CLOs). He plans to increase his equity ratio slightly and is building a private equity ratio for the first time. He also remains interested in infrastructure investments for cash flow reasons. Ingo Mainert is also adding more fixed-income investments to his portfolio, declaring: “Interest is back, thank goodness – 60/40 lives!” He is mainly buying government bonds to slowly but surely extend the portfolio’s maturity profile, as well as investing in corporate bonds with high credit ratings. Dr. Götz Albert highlighted European small and mid caps, which recently underperformed large caps by 25%. However, with a P/E of 10x, small and mid caps are cheaper than they have been in a long time. Albert is confident that their share prices will recover, as they have structurally higher levels of growth and thus exhibit better share price performance over the long term.


For the results of the TED survey, visit: TED survey.

The best from the capital market podium