Alternatives   |   Nov 19, 2020

Private Alternatives Outlook 2021: The New Normal?

Unprecedented. Extraordinary. Uncertain.

Marc-André Desjardins
Chief Investment Officer, Fiera Private Alternative Investments
Candice Bangsund
Vice President and Portfolio Manager, Global Asset Allocation

There are many words to describe financial markets in 2020, but “normal” certainly is not one of them. Equity markets the world over were rattled by the imminent slowdown in global growth, culminating in the fastest bear market on record in March, only to recoup losses (and then some) just a few months later. In the realm of fixed income, liquidity issues were front and center at the peak of the crisis, forcing governments to step in and guarantee liquidity in order to reassure investors, but low rates still plague those seeking safe sources of income. The commodity market wasn’t spared – for the first time in history, oil buyers were being paid to take on product after benchmark prices for WTI crude plunged to negative $37 a barrel. The “new normal”, it would seem, is anything but.

Yet while these traditional asset classes stole headlines, equally interesting were the investments that didn’t spend much time under the spotlight: infrastructure; agriculture; private debt; real estate; and private equity. These nontraditional assets flew under the radar, but for all the right reasons; as the market panicked and volatility set in, these asset classes performed as expected, generally experiencing relatively minor volatility while generating positive income. In short, they brought stability to a volatile and uncertain world.

If we had to describe 2020 in a few words, it would be “wake up call.” Equity investors have been enjoying one of the longest bull runs on record with few bouts of volatility. However, in 2020, investors were reminded that volatility and market drawdowns are not a matter of if, but when. Similarly, bondholders have witnessed the seemingly endless decrease in rates over the last few years. But those seeking safe sources of income are now attuned to the fact that government yields nearing 0% won’t be able to meet their needs for the foreseeable future thanks to Jerome Powell saying that he’s “not even thinking about thinking of raising rates.”

[…]

Related Insights

ESG/Responsible Investing
Jan 8, 2021

ESG Everyday: A Framework for Fixed Income Portfolios

The words Environmental, Social and Governance have become commonplace in the lexicon of investors of late.
Philippe Ouellette
Vice-President and Senior Portfolio Manager, Fixed Income
Fixed Income
Dec 15, 2020

This Time, It’s Different

Moving into 2021 as a mindful bond investor.
Jean-Guy Mérette
Vice President and Portfolio Manager, Fixed Income
General
Feb 4, 2021

Market Update from the Global Asset Allocation Team – February 2021

After a solid start to the new year, sentiment deteriorated and the global equity market rally stalled-out even as the ramped-up global vaccination campaign and the prospect for increased U.S. fiscal spending emboldened calls for a rapid recovery.
Candice Bangsund
Vice President and Portfolio Manager, Global Asset Allocation
General
Jan 11, 2021

Market Update from the Global Asset Allocation Team – January 2021

A tumultuous 2020 came to a close on a positive note amid optimism that the distribution of safe and effective vaccines will revitalize the economy in 2021.
Candice Bangsund
Vice President and Portfolio Manager, Global Asset Allocation