In September we hosted our first Investment Horizons conference in London where we brought together clients and friends of the firm to explore the dynamics of today’s global investment landscape.
The conference was opened by Sir Robin Niblett, former Director and Chief Executive of Chatham House, in conversation with James Harding, founder of Tortoise Media, who talked about global elections and geopolitics. Throughout the afternoon we held a series of sessions with senior members of the Brown Advisory equity and fixed income teams as well as external experts from Beutel Goodman, KKR and Accel. They talked about major asset classes including global equities, global fixed income, and alternative investments.
Below we have written a summary of the topics discussed with a link to the recordings for those who would like to listen to the discussion in more detail.
Global elections and geopolitics
Looking ahead to September 2025, it is expected that the newly elected US president's foreign policy will significantly impact global geopolitics. If Donald Trump wins, we should expect aggressive trade tactics, border closures, and strained relations with China. In contrast, a Kamala Harris presidency would likely continue Biden's policies, focusing on transatlantic alliances and maintaining a firm stance on China and Ukraine.
Sir Robin Niblett highlighted the increasing tension in the "New Cold War" between the US and China, driven by conflicting ideologies and strategic ambitions. China's deepening relationship with Russia and its growing nuclear capabilities pose significant global threats. As global challenges like migration, climate change, and economic instability rise, nations are shifting towards "strategic sovereignty" and forming new alliances to navigate these turbulent times.
Navigating shifts in Global Equity Markets
The comparison of the AI boom with Netscape and the rise of the internet suggests that while early innovators like ChatGPT may not ultimately dominate, significant value will emerge through data augmentation and infrastructure investments. As such, patience is advised, as it often takes years to see which applications will dominate, similar to how Uber emerged four years after the App Store launch.
The "Hype Cycle" highlights the stages of technology adoption, emphasizing patience for productivity gains. Investment opportunities extend beyond major players like Microsoft, with niche software markets and ex-US markets offering promising returns, despite geopolitical and regulatory risks.
Cultivating Healthy Habits for Success
The habits of curiosity, conviction, and contrarianism can significantly enhance investment decisions and promote long-term success. Curiosity drives investors to seek new opportunities and deeply understand market dynamics, while conviction allows them to stand firm in their beliefs, even when market sentiment is against them. Contrarianism, often requiring to be comfortable with uncertainty, encourages independent thinking, and often leads to the discovery of undervalued investments. By fostering these habits, we can embrace self-improvement through adapting processes based on new information, and leverage small incremental improvements that compound over time, leading to significant benefits in relationships, learning, and even company-level cash flow.
Echoes of History: Mastering Market Flexibility
In today’s rapidly evolving economic landscape, achieving mastery in market flexibility requires integrating both top-down and bottom-up research into our investment strategies. As we transition from the “new normal” post-GFC era to a standard resembling the “old normal,” it is crucial to recognise the multiple phases of economic cycles, each demanding different levels of portfolio risk. This necessitates dynamic asset allocation, adjusting risk levels and portfolio composition based on macroeconomic conditions and fundamental, sustainable investment research.
Assessing our position in the economic cycle and adapting accordingly allows us to capitalise on investment opportunities, effectively manage risk, and ensure capital preservation for our clients amidst increased market volatility and economic turbulence. This approach not only helps in navigating the current market conditions but also positions us to take advantage of the opportunities that arise from this new normal.
Unlocking Potential with Alternative Investments
The US leads the tech and startup scene, while Europe is still searching for its place. Significant private investment opportunities exist in Europe, requiring an understanding of diverse market dynamics and regulatory environments. A recent report written by Mario Draghi, former European Central bank President, emphasizes the need for substantial investment to boost Europe's competitiveness. Private equity and venture capital firms must navigate these complexities to foster growth, using proven strategies and disciplined approaches. The current market reset from overvaluations is building confidence in private investments, though IPO hesitancy remains due to regulatory and economic factors.
Final Remarks
At Brown Advisory, we believe in the power of patience and a long-term view. While AI may seem like a quick win, history teaches us to seek out vertical niches rather than horizontal market dominance. We recognize the emotional nature of investment decisions, influenced by behavioural psychology, and strive to maintain an open and growth mindset to mitigate biases. Thoughtful consideration, thorough research, and robust discussion underpin our investment philosophy, driving better decision-making and outcomes. 
Please visit the insights section of our website for additional thought leadership and information about our investment strategies.
Disclosures
The views expressed are those of the speakers and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance, and you may not get back the amount invested. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the speakers on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only and is not individually tailored for or directed to any particular client or prospective client.