(CercleFinance.com) – The CapitalMarketsStrategies team of Tikehau Capital presented its investment prospects for 2024 on November 21.
According to Thomas Friedberger, deputy managing director and co-chief investment officer of the group, two main categories of investment opportunities are currently emerging.
‘The first is linked to the existence of ‘mega-trends’ in the market, that is to say areas in which all companies around the world will have to invest massively to increase their resilience,’ he says. , clearly referring to cyber security and the energy transition.
As for the other opportunities, they are linked to the liquidity crisis ‘a crisis that liquid markets do not want to see but which we strongly feel’, assures the specialist.
Indeed, in a context where liquidity is drying up, the group believes that it will be able to finance at attractive rates both real estate projects and healthy companies but, for example, faced with a risky acquisition or excessive leverage.
In this particular context – and while all specialists in the financial world have their eyes riveted on rates, anticipating the slightest change – Tikehau believes that ‘it is not necessarily the short rates which are too high but perhaps the long rates which are too low.’
For the group, the wave of inflation that has been hitting each side of the Atlantic for almost two years has not only a cyclical component but also – and perhaps above all – a structural component.
Thomas Friedberger explains: ‘When China joined the WTO in 2001, it doubled the world’s workforce. With low labor costs and a devalued currency, disinflation was mechanically exported.
Twenty years later, the landscape has changed: the average Chinese is now 38 years old, he is no longer just a worker but also a consumer. And Beijing has moved from an export model to a model of developing its domestic market, building a monetary bloc around a stronger and more stable currency. So many inflationary elements, points out Tikehau.
The group’s analysis does not stop there: inflation would also be driven by the deglobalization movement at work, with companies repatriating their production to Europe and the USA where the cost of labor is higher.
And what about the ‘global energy mix’ characterized by the disappearance of cheap Russian gas in Europe and by an America which now exports its shale gas and oil to Europe, at higher prices…
This examination leads Tikehau to anticipate a period marked by structural inflation of 3 to 4%, i.e. levels which will dissuade central banks from returning to an ultra-accommodating monetary policy – except of course episodically, in the event of a recessionary shock.
The group is thus clearly distancing itself from the scenario ‘priced’ by the market, that of a rate cut from mid-2024 which would signify the victory of central banks over inflation.
Tikehau therefore expresses his caution on the evolution of the stock market in 2024, indicating not to expect extensions of multiples and rather anticipating disappointments regarding the expected growth in results.
To summarize, ‘we are both cautious and optimistic, in an environment that will create enormous investment opportunities,’ concludes the specialist.
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