Sinisa Vukic: Emerging markets offers ways to make an impact
Ahead of next month’s LGC Investment & Pensions Summit in Birmingham, five questions with the lead portfolio manager at Cardano. Book your place at the summit now.
From your perspective, what do you think will be the biggest issues in the next 12 months?
- I believe that the geopolitical tensions we are facing across the globe will heavily impact markets this year, and the outcomes of this year’s elections will shape the world for the next four to five years.
- However, emerging markets remain resilient despite the pressures and are innovating to cope with the global challenges they are facing.
In the current investment climate, how would you advise pension managers to balance risk and opportunity?
- It is clear that developed markets provide safety due to familiarity. However, emerging markets offer the possibility to make an impact in ways that our local markets cannot.
- These markets offer varied opportunities. If we go back to globalisation and help those economies to grow and assist them in developing their capabilities then we ourselves will reap the rewards.
- By using impact investing we can help drive real world change, such as investing in schemes that can target carbon reduction. Reducing the world’s carbon exposure will not only benefit those in the area we invest, but the rest of the world as a whole too. We have found that investing in the emerging markets doesn’t have to be as volatile as its reputation makes out.
- The financial and ESG (environmental, social and governance) argument is there, but also we are helping those that need it the most.
- Through this we can mitigate the risks and form opportunities by creating a new niche, develop people skills and have greater access to the future market. We see the largest drivers of capital growth within Africa and Asia and to engage with these markets, we should be making sustainable, better investments.
How do you think the ESG (environmental, social and governance) landscape has evolved over the last year?
- One year isn’t a long-time, but we just need to look out the window to see that change is happening faster.
- We have all seen more erratic weather and that the impacts are greater, especially in emerging markets which are less prepared.
- We need a holistic approach to ESG to really make a change. We cannot merely focus on climate, as E, S and G all go together to drive real-world impact. By focusing on the S in the emerging markets we can help to drive more long-term solutions to the E.
- We are all facing global, climate and sustainable development issues and so there should be an urgency to invest in sustainable and environmentally friendly markets.
How do you think the change of government in the UK will affect investor conversations?
- We understand that under the new Labour government there will be a continued encouragement for the LGPS to invest in the UK, which is understandable. However, this doesn’t mean they can’t also look at the emerging markets too, alongside this UK investment.
- We believe there is still a case for emerging market investments for both financial and diversification reasons, alongside the reward of real-world impact.
- We would like every government to work together to help drive change for the greater good. Focusing just on your own country can be counterproductive for issues like climate change.
What do you hope the audience will be able to take away from your contribution to this year’s LGC Investment & Pensions Summit?
- The aim of my message is to share innovative ideas and new best practice so leaders can broaden their scope of investments and take a chance on making global change through emerging markets.
Sinisa Vukic, lead portfolio manager, Cardano
Cardano is a sponsor of the LGC Investment & Pensions Summit taking place in Birmingham on 11-13 September. View the programme and book your place here.
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