Public chaos, private consensus: Mercer rides the supercycles

Core Viewpoint - The investment landscape is undergoing significant changes, with traditional norms in portfolio construction and risk management being reexamined and often overturned [2] Group 1: Investment Themes - Mercer categorizes future investment themes into three categories: regime change, supercycles, and megatrends, each presenting unique risks and opportunities [3] - Some themes may only be suitable for investors with high governance capacity and expertise, particularly in private markets [3] Group 2: Private Assets - Private assets have been promoted as a key diversifier, with a growing trend towards retail-friendly products and political discussions in New Zealand [4] - The allocation to private markets in New Zealand is expected to grow from the current 2-3% to potentially 15-20%, aligning with Australian levels [5] - Mercer NZ currently has about 8% of its diversified funds allocated to private assets, which is expected to increase [6] Group 3: Specific Investments - Mercer NZ and Australian funds jointly invested in the Highbrook Park logistics centre, acquiring a 13% stake in an asset valued at $2.1 billion [7] - The private credit asset class represents about 2% of the NZ funds, despite some regulatory concerns in jurisdictions like Australia [8] Group 4: Manager Strategy - Mercer NZ utilizes 16 private credit managers and typically aligns with the global parent’s manager pool, but has made exceptions to better suit local needs [9][10]