Funds Congress Highlights

Asset managers and financial institutions are operating in a world increasingly influenced by shifting geopolitical dynamics. This article delves into four key geopolitical trends in 2024 – shifting ideological tides, political reconfiguration in the UK, the challenge of restoring political trust, and the impact of election dynamics and unforeseen shocks. These trends are shaping the global political landscape and have significant implications for the asset management industry. Understanding these geopolitical shifts is crucial for asset managers to navigate potential risks, seize opportunities, and formulate effective strategies in this changing environment.

Shifting ideological tides: The coming year represents a pivotal moment in global political engagement as an estimated four billion people in 50 nations – almost half the world’s population – go to the vote. For better or worse, the spotlight shines most brightly on the United States, but prevailing themes of political distrust and the burgeoning appeal of populist ideologies echo a shared political narrative across much of the world. Notably absent is any celebration of democratic values; in its place, pervasive disaffection and a conspicuous pivot to the right, giving rise to a palpable feeling that decision time has arrived in the choice between autocracy and democracy.

Political reconfiguration in the UK: In contrast to the global rightward tilt, the Labour Party’s transformation under Keir Starmer has significantly bolstered its electability. Key challenges facing future Labour governments range from navigating potentially seismic shifts sparked by the integration of AI into an employment landscape deeply rooted in services to invigorating an economy still labouring under the legacy of successive rounds of austerity. For now, Labour continues to tread carefully on any possible realignment with the European Union, although a substantial election win could provide a mandate strong enough to make some very bold decisions.

Restoring political trust: Across major economies, a pressing concern is the erosion of public trust in politicians and politics itself – a particularly live issue in a post-Johnson UK. To help bridge the disconnect with the electorate, political leaders might reinforce their commitment to the Nolan Principles, emphasising honesty, integrity and selflessness in public service. Other proposals include an induction system for new Members of Parliament in hope of shaping the ethos of newly elected representatives before disenchantment sets in. It’s not helped when governments fail to listen to the electorate – chronic, real-world problems such as housing drive voters straight into the arms of the populists.

Election dynamics and unforeseen shocks: Electoral forecasts remain vulnerable, of course, to sudden disruption by unforeseen events that can drastically alter political fortunes – just look at recent elections in Australia, Norway, Scotland and Spain, where unexpected developments dramatically reshaped the political terrain. In the U.S., the main candidates’ advanced ages and the legal controversies buffeting Trump suggest at least the possibility of sudden profound change.