Key Points:
Johnson & Johnson has spun out a portion of its consumer brands division
Stable, predictable brands should thrive as the economy decelerates
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A key mega trend our team is excited about is the migration of assets to alternative asset managers. Within the asset management industry, the alternatives category is growing fast and with significant room to expand. The "smart money," which includes foundations, endowments, pensions, sovereign wealth funds, and insurance companies, have been investing in private markets for decades and between 20-40% of their total portfolios are still invested in this category today. The high-net-worth and private wealth markets have been much slower to adopt the private markets, but meaningful asset growth has begun while still being only roughly 2-4% of a typical HNW portfolio. Although they should, I do not expect the retail market to begin allocating like the smartest institutions. However, from where we sit today, there is still meaningful growth ahead in this channel. A recent Evercore ISI report shows each incremental 1% allocation from the wealth management platforms would mean $100 billion of additional assets to alternative managers. That's powerful stuff.
The recent shift in tariff policies has added a layer of complexity to the economic landscape, potentially influencing market sentiment and investment decisions.
There are several powerful mega-trends happening around the world. One of these trends is happening in the financial services industry and is still a game in the early innings.