Africa will increasingly align with China while Europe will tend towards
“Multinational companies will need to have two sets of standards if
they are to continue to operate globally,” he said. “They will need to
position themselves for that.”
The theme of technology as a disrupter was also addressed by Bettina
Warburg, co-founder, Animal Ventures, who said that blockchain will
play a central role in the way economies work in the future by enabling
increasing decentralisation and lowering uncertainty in how we trade.
In a presentation called “The decentralised economy” Warburg said
that while blockchain is now a familiar concept to most in the business
and investment world, few truly understand its potential for changing
the way the global economy operates.
She explained that the key function of blockchain will be its ability to
lower uncertainty when third parties trade and do business, lowering
barriers and enhancing trade in the process. “We no longer need a
middle man or an institution in the middle of transactions—we can
suddenly do one-to-one transactions but on scale,” she said.
She described the decentralised framework created by blockchain
as creating a new “shared state of reality” managed by decentralised
virtual machines. “But the key point is that this allows us certainty and
extends our ability to trade,” she said.
Warburg explained that Animal Ventures works consulting, investing
and building prototypes for the real application of blockchain technology
to business and industry. It works with a number of Fortune 100
companies exploring how they might leverage blockchain to improve
how they do things.
She noted that one of the fastest adopters and potential biggest
beneficiaries of this technology is the supply chain and logistics sector
where companies want to be faster and more efficient and narrow the
gap between the originator and the consumer.
“It will also help augment the gap between human intelligence
and machine,” she said. “The reality is that every asset has its own
supply chain—everything is coming from somewhere and is moving
somewhere whether it is a physical asset or a financial asset.
“It will change the interaction between humans and machines and
change economic activity as we know it today.”
The other big theme of the event was so-called impact investing, seen
in the industry as representing a natural evolution from ESG standards.
This will play an increasingly central role in the alternative investment
sector especially once a framework or set of standards is developed for
how to measure it, said Cowell.
He said that almost all funds are now looking at the concept and
grappling with how to apply it their own portfolios. He added that
whereas ESG was a relatively passive or reactive approach to an
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believe that investing in innovation should be the top priority for chief
executive officers and other C-suite executives. This response was
far ahead of building trust with employees (19 percent), evaluating
workplace policies (9 percent), and growing jobs and wages
“More than ever before, the alternative investment industry is
experiencing a dramatic technological shift, and financial services firms
realise they will need to incorporate innovation into their investment
processes and business operations or otherwise risk falling behind their
peers,” said Duggan.
“This year’s survey results demonstrate that the alternatives industry
has finally reached a tipping point, recognising the undeniable impact of
technology on the future of global markets.”
Looking specifically at the tech-related shifts most expected to
influence markets, survey respondents believe automation and machine
learning (45 percent) and blockchain technologies (38 percent) are likely
to have the biggest near-term impact globally.
When asked about the global markets more broadly, key survey
highlights included government instability causing volatility, with 38
percent of respondents believing signs of government instability, such
as Brexit and the US government shutdown, will be most to blame for
a market correction.
Other factors driving volatility include a private credit bubble (26
percent), trade tensions with China (21 percent), and tightening
monetary policy (15 percent).
Nearly 40 percent of respondents identified pressure from the general
public or government officials as the primary driver behind investors’
growing interest in responsible investing. This pressure outweighed
a commitment to helping solve the world’s challenges (28 percent),
recognition of environmental, social and governance (ESG) factors as
material to performance (22 percent), and a herd mentality to keep up
with other investors (10 percent).
Finally, investors believe cryptocurrency is the asset class that most
represents a bubble right now (45 percent), as compared to US equities
(20 percent), the leveraged loan market (19 percent), and private credit
These themes were reflected by some of the speakers at the event.
Ian Bremmer, president and founder, Eurasia Group, told delegates
that an increasing dislocation will emerge between the fundamental
technology platforms being developed and used by China and the US as
a ‘cold war’ as technology develops around the world.
In a presentation titled “Entering the digital vortex in an uncertain world”
Bremmer said that the current geopolitical tensions and uncertainty
will not disappear. He said they are driven by “misassumptions” about
China and globalisation, and are being fuelled by digitisation.
He said that many assume that as China becomes wealthier, it will
also become more like the west—more democratic, more open and
more integrated into global systems. In fact, he argued, while the US
and China will soon resolve tensions over trade, a different dynamic will
play out in terms of technology and they will compete to develop rival
“Neither government wants a trade war and that will lead to something
that feels like a deal. That is how globalisation is supposed to work,”
“But in terms of technology, the opposite is true. They will continue to
develop competing systems that are not mutually dependent on each
other and that will lead to a fragmentation of technology.”
Bremmer argued that countries will need to choose which system
to base their own process of digitisation around: countries in Asia and
“Financial services firms realise
they will need to incorporate
innovation into their investment
processes and business
operations or otherwise risk
falling behind.” Chris Duggan