Human capital is the foundation of long-term economic growth, yet in Western democracies, it is under severe and structural strain. Education systems are faltering, producing graduates lacking core competencies, while civic discourse increasingly rewards outrage over critical thinking. Meanwhile, the rapid advancement of AI poses a double threat, displacing low- and mid-skilled jobs while demanding higher-order cognitive abilities that our current systems fail to cultivate. This erosion of "Human Intelligence" threatens our ability to innovate, govern effectively, and sustain competitive markets. In Australia, productivity growth has stagnated, reflecting issues in skills development, institutional capacity, and economic dynamism at the same time that rising inequality, falling birth rates, and widespread reliance on government support signal the breakdown of the aspirational social contract. Meanwhile, shallow public understanding of China and a shrinking pipeline of China-literate experts leave Australia dangerously unprepared for a complex strategic environment. This complex array of issues is changing the outlook for economies and investment markets. It is time to make a move – we can each contribute to shaping a smarter, more resilient future, and, by better understanding these issues, practitioners can better manage risk and uncertainty, and design portfolios capable of improving the financial well-being of individuals.

Western order that has long underpinned global prosperity is cracking. Not dramatically. Quietly. And nothing feels missing, until everything is. From the origins of Western order in the Renaissance through the Enlightenment, five interconnected crises now threatening its foundations: fragmenting trade; collapsing alliances; fading Western hegemony; vanishing civic knowledge; and, an AI revolution that will amplify every weakness. Business leaders and citizens alike have become unwitting guardians of this inheritance. When its foundations crumble, the rules we take for granted simply stop working. Just as the Medici invested in civilisation and created returns measured in centuries, today's leaders must become Renaissance people in dark times. That means thinking across fields, building what lasts and looking beyond the next quarter and to the next century. Our choice is simple – optimise within decline, or rebuild the foundations that made our prosperity possible.

In an era defined by rapid economic shifts and evolving banking regulation, traditional areas of the private credit universe are becoming increasingly saturated and necessitate caution. The time to make a move is now – asset-based finance is emerging as a compelling frontier for investors seeking stability of income, downside protection through collateral, diversification, and attractive returns.

As yields remain at decade highs, Australian investment-grade credit is no longer just a defensive anchor, it’s become a strategic source of return. Offering 7–8% returns from high-quality, liquid securities, this segment now competes with high yield, private credit and offshore strategies, but with greater transparency, lower complexity and less downside risk. With parts of the private credit market under pressure from rising impairments and liquidity constraints, investment-grade credit provides a way to access equity-like returns without taking on additional risk or sacrificing liquidity. In today’s environment, there is no need to move up the risk curve. Diversified, liquid investment-grade strategies continue to deliver superior risk-adjusted returns compared to less liquid alternatives, while preserving capital and enhancing portfolio resilience.

Value has and continues to be a cornerstone of equity investment discipline and the uncovering of mispricing that is central to active management. Now, in a market captivated by growth narratives and the allure of quality, investors are risking imbalance and volatility in their core global equities allocations. Investors should challenge what value means in today’s evolving market and think pragmatically about how value co-exists alongside other accretive factors, thereby uncovering opportunities that challenge the traditional definition. If they get it right, a greater focus on valuations in core equity allocations will deliver a smoother investment journey in the decade to come. It's time to question where your next dollar should go, challenge current allocation strategies, and move towards value as an indispensable component of every portfolio.

Private credit is a maturing asset class globally but expanding rapidly in Europe (outpacing growth in the US). Europe provides compelling geographic and sector diversification, and a strong bias towards resilient sectors with high visibility on cash flows. European spreads tend to price at a premium to their US counterparts, the market is less mature, more fragmented and provides higher interest cover and lower default rates. Don’t discount the untapped potential of European low to mid-market companies that can offer lower leverage and spread pick-up opportunities. Now is the time to add European private credit to portfolios.

Corporate returns on capital tend to progress along a life cycle - they accelerate, compound, fade, mature, and turn around. When you think about global equities, every company can be placed in one of these five categories. By selecting stocks and constructing portfolios within a corporate life cycle framework, the alpha driven by stock selection is increased significantly, while generic factor and style specific risk is reduced significantly, too. This leads to far greater risk-adjusted returns across all market environments - something allocators must strive for in their global equity core. It’s time to move global equities portfolio construction and stock selection with the corporate life cycle - for alpha, balance, and consistency.

The explosion of data and advances in AI have permanently changed active investing. In an era where most market-relevant information has been created in just the last two years, the alpha edge lies not in discarding skill, but in scaling it. The core ingredients of alpha are skill, breadth, and efficiency, yet to optimise it now requires a systematic approach. Systematic investing processes vast datasets, identifies predictive linkages, and executes with discipline, stripping away behavioural biases. The portfolio construction implication is clear – now is the time for active managers to embrace scale into their investment process by leveraging data and technology to stay ahead and to help generate repeatable alpha. Those who don’t will be left behind.

In a world of disrupted supply chains, recalibrated interest rates, and technological acceleration, asset class dynamics are being redefined as some sectors quietly set up for multi-period outperformance. This session explores key challenges and opportunities in multi-asset class portfolio construction that practitioners should be thinking about – three asset class issues that it’s time to make a move on – in order to deliver best-of-strategies solutions capable of improving the financial well-being of individuals.

Capital and companies are shifting away from public markets. The rise of the passive listed equity fund has created unparalleled indexation and correlation in the public domain. Conversely, private markets have demonstrated return outperformance (with less volatility) over a long period of time. The result is a generational shift in capital and businesses to the private markets. Within private markets, mid-market private equity is home to some of the country’s most dynamic, high-growth investment opportunities. Yet most of these remain out of reach for public market investors. In fact, the number of mid-market businesses across Australia and New Zealand is over nine times greater than the total number of companies listed on the ASX. Mid-market private equity managers pursue an opportunity set that is vast, with less competitive pressure, and greater relative value creation potential. Innovation in accessible private market investment structures means now is the time to think beyond public markets and make your move into mid-market PE.

Emerging markets account for over half the world’s population and a third of global GDP, yet they remain glaringly underrepresented in most investment portfolios. After a decade of US mega-cap tech dominance, investors have largely sidelined EMs, discouraged by weak performance and relentless negative headlines. But markets are cyclical, and today’s low valuations could be the springboard for a powerful rebound. EMs also bring a critical ingredient that portfolios are starving for - diversification. In today’s narrow, concentrated market landscape, that’s not just a nice-to-have, it’s an essential ingredient for resilient client portfolios. The world has changed, and ignoring emerging markets now could mean missing one of the most compelling opportunities to build portfolio resilience and unlock growth. Is it time to quadruple emerging markets exposures?

In today’s information-saturated markets, the challenge isn’t ignorance – it’s bias. Recency, overconfidence, anchoring, and confirmation bias shape more portfolio decisions than many realise. The edge no longer lies in discovering what’s happening, but in discerning what truly matters. Where traditional approaches falter, systematic investing rises to the challenge, using data science, probabilistic thinking, and structured processes that strip away narrative traps and deliver repeatable, robust outcomes. Performance over one year is luck; over many years, it’s process. Systematic strategies prioritise transparency, consistency, and adaptability, building portfolios that resist the allure of storytelling. For those seeking to move from episodic brilliance to persistent advantage, the verdict is clear – now is the time for systematic investing.

A portfolio is only as good as the sum of its parts. This session explores key challenges and opportunities in multi-asset, multi-manager portfolio construction that practitioners should be thinking about – three portfolio deign issues that it’s time to make a move on – in order to deliver best-of-strategies solutions capable of improving the financial well-being of individuals.

The enduring gap between investors’ intentions and their market actions is a critical challenge. While investors may voice clear objectives, ranging from long-term retirement savings to ethical mandates, their behaviour often lags. This is not a failure of financial knowledge, but a misalignment between personal values and portfolio goals. By first articulating and understanding their core values, investors can design objectives that are not just financially sound but also compelling psychologically and behaviourally. This values-first approach closes the gap between intent and action, leading to more effective portfolios.

Picking back up from the inaugural Portfolio Construction Forum da Vinci Lecture the prior day, renowned journalist and editor Michael Stutchbury sits down with Oliver Hartwich to discuss the five interconnected crises threatening the foundations of the Western order discuss the practical implications for Australia and NZ, which depend on global trade, laws, stable currencies and open technology. When big powers shake up these systems, it is usually the smaller countries that feel it first. The world we created from the Peace of Westphalia to Bretton Woods owes much to thinkers like Grotius, Locke and Smith. Now that structure is coming apart. The old rules are fading away and nothing seems to be stepping in to fix things by itself. What happens next depends on us. This is not merely a philosophical choice. It is an investment one.
Legacy

Economic realities and policy shifts are diverging from market pricing. US equity valuations are at record highs and yet the outlook for the world’s largest economy is challenged. In addition, tensions between the White House and Federal Reserve raise the risk that the independence of the central bank will be undermined. It's time to make a move to rebalance portfolios, adjusting allocations across geographies, asset classes, and factors.

This diverse panel of asset class experts discusses and clarifies the implications of four global economic and markets outlook scenarios for the medium-term (three-year) outlook for key asset classes, during which the Strategies Summit delegates vote to give their view on the likelihood of each scenario, from most to least likely. The asset allocation implications are then revealed in the Peer Exchange Group session later in the morning.

In an era of increasing fee compression, complex global markets, and individual investors’ growing preference for customisation and personalisation, the traditional model of outsourcing investment management to an OCIO is reaching its practical limits. While it offers scale, it often operates as a transactional, one-size-fits-all solution that keeps the investment adviser at arm's length. The OCIO relationship with the investment adviser needs to evolve from this transactional, 'outsourced' model to a deeply integrated partnership that moves beyond an investment-only service to being a strategic asset that unlocks greater "Solutions Alpha" – the tangible value derived from improved investment outcomes, greater business efficiency, and increased investment advice agility – to directly enhance both investment advice practice value and the financial well-being of individuals.

Investment is more than technical; it is fiduciary and communal, requiring alignment with values and stewardship of economic and social foundations. Oliver draws together the threads of Strategies Summit 2025, sharing his key takeouts and the implications for investment fiduciaries becoming civilisational stewards.

The subject at hand being so difficult, it is no surprise that almost all commentators can find some logical justification for any theory of currencies they may hold.

The draft US/EU trade agreement just concluded sets a 15% tariff on most European exports to the US against a 0% reciprocal tariff. The match goes to Trump, 15 to nil.

Markets seem to have grown less reactive to US President Trump's unpredictable actions. But despite recent market calm, ongoing trade wars, economic disruption from Trump’s policies, and geopolitical tensions warrant a cautious investment strategy.

This paper provides a great summary of the role played by asset consultants and the existing literature on asset consulting (including why they're fired).

This paper examines the impact of a key feature of competitive markets on moral behaviour - the possibility that a competitor might step in and conclude the deal if a conscientious market actor forgoes a profitable business opportunity for ethical reasons.

The steady rise of stablecoins is setting the stage for the next financial meltdown. The Federal Reserve could defuse the time bomb by issuing a digital wallet, the mother of all stablecoins.

Jerome Powell's term as Fed chair does not end until May 2026. But US President Donald Trump is reportedly preparing to name the next chair early in an effort to undermine Powell.

While the impact of US trade tariffs will be far less than investors fear, broad portfolio diversification is paramount and indexed strategies are no longer appropriate.

The 1973 Yom Kippur War and Iran's Islamic Revolution in 1979 led to a massive spike in oil prices that fuelled severe stagflation. This time is likely to be different for many reasons.

In an industry saturated with greenwashing, woke-washing, whitewashing, and other appeals to our ethical sensibilities, moral courage is a critical virtue for upholding high ethical standards and building societal trust.

The recent surge in government bond yields raises a critical question - should corporations lock in debt at current interest rates before they rise further?

There is growing public alarm about how generative AI might obliterate industries and professions. What's often overlooked is that the first major victim will undoubtedly be the technology sector itself.

Private market assets can complement traditional equity and fixed income allocations, helping investors participate in the upside of favourable equity markets while mitigating drawdowns in difficult ones.

When economists celebrate the 250th anniversary of the publication of Adam Smith's The Wealth of Nations next year, President Trump's mercantilism will constitute an incongruous backdrop.

I have significantly rethought the likely implications of the Trump administration's impact on the world's economies and polities. I am more optimistic.

Private equity is promoted as providing returns several per cent higher than investing in public equity markets. These two papers reveal the true returns that private equity delivers to investors, identifying the real winners (the managers).

Ethical standards and codes serve as guiding principles for professionals - but the application is rarely straightforward. This paper reviews recent literature on moral judgment and the behavioural implications.

With President Trump's tariff war in full swing, attention is turning to the "Mar-a-Lago Accord", a plan to weaken the dollar. Clever as it might be, but it is based on a flawed diagnosis.

Even if Mickey Mouse were president, the US would still be on the way to 4% growth, because US private-sector innovation promises to offset bad policies and erratic policymaking.

While some people argue that US trade tariffs will boost the domestic economy, history shows that such policies will more likely reduce international trade and increase unemployment around the world.

The supply-chain disruptions during the Covid pandemic look almost quaint compared to the fundamental reordering of global trade now underway and which threatens a prolonged period of stagflation.

I have long argued the world is in the process of bifurcating into two economic ecosystems, one led by America and the other by China. As is now obvious to the world, the split is accelerating.

This Research Spotlight focuses on the Talaria Global Equity strategy, a value-biased global equities exposure executed through the use of exchange traded options.

In the space of little more than two months, Trump has turned the world inside out. The Trump shock is the functional equivalent of a full-blown crisis. Concerns over the global economic forecast seem almost trivial.

This narrative has been doing the rounds for a while and - in terms of unlisted property at least - has been fairly close to the mark. However, going forward, it has become a really unhelpful idea.

If there is one thing those in the finance industry should understand, it is how markets function. The starting point is the Efficient Market Hypothesis - however EMH is amazingly poorly understood.

According to the latest generation of behavioural finance theory, individuals seek life wellbeing (underpinned by financial wellbeing) which additionally incorporates non-financial factors.

If MAGA ultimately helps everyone break their dependency on the US consumer, the rest of the world will have much to thank Trump for. The only losers will be ordinary Americans.

For the past 30 years, a revolution has been underway in how investment markets and economies should be viewed and understood. This Backgrounder introduces the key elements of this revolution – termed Complexity Economics – and explains the implications for understanding investment market behaviour and constructing portfolios.

The new US administration could upend assumptions about global growth and markets for years to come. Investors need to prepare portfolios now for a new investing era.

Near- and medium-term gaps in current market narratives and perceptions lead to a simple conclusion - it is time for caution.

Extraordinary and interrelated developments are unfolding in politics, geopolitics and deep tech innovation. Trump's disruptive approach has enormous implications for global markets.

By combining AI, alternative data sets, and human expertise, investors can identify new themes, access untapped markets, and capitalise on market dislocations.

As inflation has re-emerged, interest rates have risen and asset prices have levelled off and even declined, a withdrawal of capital from commercial real estate lending markets is creating a new opportunity to be greedy when others are fearful.

For the last decade, technology companies have been rallying. But quality investing is more than just tech. Defensive equity growth opportunities can fill a defensive gap in portfolios.

The heightened VUCA macro environment, coupled with an unprecedented set of industry and government catalysts, is creating a generational investment opportunity for infrastructure.

As the private credit sector grows, it faces increasing media scrutiny, making a manager's approach to disclosure of default rate and causes an increasingly important consideration for investors.

The US (and soon rest of world) hasn't seen this much demand for power since World War 2. While this introduces investment possibilities for many segments, listed infrastructure is disproportionately well-placed to fill this gap.

Investors should pivot exposure to the growing number of high quality, mid-cap companies that have reinvested to develop market-leading products with global opportunities and long runways for growth.

At current valuations, high quality core bonds offer attractive yields relative to cash, as well as the prospect of higher and less volatile returns than equities over the next five years.

Direct lending has become the fastest-growing segment within private credit offering the opportunity for premium yields that are often unavailable in the public credit markets.

As investors chased Mag7, a wide valuation gap opened up. Investors need a fresh growth narrative. TICKing off four markets - China, India, Korea, and Taiwan - is the most efficient starting point and opportunities abound.

The lower coverage of SMID Caps means greater opportunity to exploit market mispricing relative to large caps.

In mid-market Australian private equity, where inefficiencies and hands-on value creation thrive, outsized returns are being captured beyond the public eye.

Understanding the drivers of and outlook for the markets is essential to multi-asset, multi-manager investing (MAMMI). However, MAMMI is full of traps. As the saying goes "It's simple, it's just not easy!".

As we progress through the Trumpification of markets, the political and information prism through which we view the world will help us mind the gap(s) between market perception and investing reality.

Our end of day session revealed delegates' views on which of the high conviction theses they'd heard through the day they intended to investigate further or implement in practice.

Our post-program Implementation Zoominar led by consulting firm, InvestSense, drew together the key takeouts from Markets Summit 2025 and the practical implications for client portfolios, turning the insights from Markets Summit 2025 into actions.

Our Markets Summit program kicks off with a video retrospective of the key events of the prior year...

Equity investors should set aside their fears of a second Trump presidency and focus instead on the structural opportunities presented by decarbonisation.

With monetary policy easing set to provide an additional tailwind for smaller companies, now is the time for practitioners to consider increasing global small caps exposure in portfolios.

Trump 2.0 is starting where Trump 1.0 ended – with distortions, convoluted logic, and the related risk of major policy blunders.

The economic damage Trump could cause will be moderate, according to Woody Brock. His bigger concern is what could go wrong with foreign policy under Trump because, in Woody's view, the probability of a global war is higher than it has been in decades.

The 2024 US election result could potentially upend assumptions about global growth and markets in the years ahead. The next four years could be Volatility, Uncertainty, Complexity and Ambiguity (VUCA) on steroids!

Irrational markets are easy to beat? You would think so. But, to quote Yogi Berra, "In theory, theory and practice are the same. In practice, they're different."

2024 was a year of confusing, inspiring, depressing, and energising developments on many fronts. It’s in the spirit of thinking differently and embracing uncertainty that I offer you this year’s set of global developments to watch over the next five years.

What impact will the next US administration have on economic growth and inflation? The answer is not yet clear, because while some of President-elect Donald Trump's proposed policies would boost growth and reduce inflation over time, others will have the opposite effect.