{"id":169695,"date":"2025-06-09T07:40:10","date_gmt":"2025-06-09T07:40:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/169695\/"},"modified":"2025-06-09T07:40:10","modified_gmt":"2025-06-09T07:40:10","slug":"big-investors-shift-away-from-us-markets-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/169695\/","title":{"rendered":"Big investors shift away from US markets"},"content":{"rendered":"<p>Welcome to FT Asset Management, our weekly newsletter on the movers and shakers behind a multitrillion-dollar global industry. This article is an on-site version of the newsletter. Subscribers can sign up <a href=\"https:\/\/ep.ft.com\/newsletters\/subscribe?newsletterIds=56b87287f224b50300bf8519\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">here<\/a> to get it delivered every Monday. Explore all of our newsletters <a href=\"https:\/\/www.ft.com\/newsletters\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/p>\n<p>Does the format, content and tone work for you? Let me know: <a href=\"https:\/\/www.ft.com\/content\/mailto:harriet.agnew@ft.com\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">harriet.agnew@ft.com<\/a> <\/p>\n<p><strong>One scoop to start<\/strong>: <strong>BlueCrest Capital Management<\/strong>, the hedge fund turned family office founded by billionaire <strong>Michael Platt<\/strong>, has gained more than 28 per cent this year after betting on a <a href=\"https:\/\/www.ft.com\/content\/47fd60cd-b051-4e8e-92fb-1405d22099a8\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">weakening US dollar<\/a>.<\/p>\n<p><strong>And one podcast<\/strong>: In the <a href=\"https:\/\/podfollow.com\/behind-the-money-with-the-financial-times\/view\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">latest episode<\/a> of Behind the Money, the FT\u2019s Antoine Gara, US private equity and deals editor, considers why alternatives giants <strong>Blackstone<\/strong>, <strong>KKR<\/strong> and<strong> Apollo<\/strong> are moving in <a href=\"https:\/\/www.ft.com\/content\/cbac2028-bc5a-41a5-867d-859028a9347c\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">different directions<\/a> and who\u2019s most likely to perform best in the future.<\/p>\n<p>In today\u2019s newsletter:<\/p>\n<ul class=\"o3-editorial-typography-list-unordered\">\n<li>\n<p>Investors question \u2018whether US exceptionalism is a little less exceptional\u2019<\/p>\n<\/li>\n<li>\n<p>We have \u2018surrendered more to the machines\u2019, says AQR\u2019s Cliff Asness<\/p>\n<\/li>\n<li>\n<p>Junk bond sales surge as companies try to beat fresh tariff uncertainty<\/p>\n<\/li>\n<\/ul>\n<p>Big investors shift away from US markets<\/p>\n<p>Big institutional investors are <a href=\"https:\/\/www.ft.com\/content\/019a275c-ab14-4ac3-8a7e-68758dd234a8\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">shifting away<\/a> from US markets as <strong>Donald Trump<\/strong>\u2019s trade wars and the country\u2019s escalating debt fuel fears about the dominance of American assets in global portfolios.\u00a0<\/p>\n<p>The US president\u2019s erratic trade policy has shaken global markets in recent months, sparking a sharp sell-off in the US dollar and leaving Wall Street stocks lagging far behind European rivals this year.<\/p>\n<p>Trump\u2019s landmark tax bill, which is forecast to add $2.4tn to Washington\u2019s debt over the next decade, has also increased pressure on US Treasuries. <strong>BlackRock<\/strong> chief executive <strong>Larry Fink <\/strong><a href=\"https:\/\/www.ft.com\/content\/f94a99e6-f1d7-4e91-912c-868965969560\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">warned on Thursday<\/a> that the US was \u201cgoing to hit the wall\u201d unless the economy grows quickly enough to manage higher deficits from government spending, joining a growing chorus of financiers warning about the country\u2019s mounting debt.\u00a0<\/p>\n<p>The move away from US assets has pushed up European markets at the expense of their US counterparts and has been signalled by surveys of big institutional investors\u2019 allocation decisions. A poll of fund managers published by<strong> Bank of America<\/strong> last month showed the biggest underweight in the US dollar in nearly two decades.\u00a0<\/p>\n<p>\u201cThe US has been the best place in the world to invest for a century, but I\u2019m starting to hear investors question whether US exceptionalism is a little less exceptional, and think about whether to position their portfolios accordingly,\u201d <strong>Howard Marks<\/strong>, co-founder of $203bn alternatives manager <strong>Oaktree Capital Management<\/strong>, told the Financial Times.<\/p>\n<p>\u201cPeople need to rethink\u201d their exposure to the US, said <strong>Seth Bernstein<\/strong>, chief executive of <strong>AllianceBernstein<\/strong>, which manages $780bn in assets.\u00a0<\/p>\n<p>\u201cThe deficit has been out there as an issue; it\u2019s just getting worse,\u201d he added. \u201cI think it is untenable for the United States to continue borrowing at the pace it\u2019s borrowing\u2009.\u2009.\u2009.\u2009When you couple that with what\u2019s going on with the unpredictability of our trade policy\u2009.\u2009.\u2009.\u2009It should cause people to pause and consider: how much do you want concentrated in one market?\u201d<\/p>\n<p>Markets in Europe, where a \u20ac1tn German spending spree on defence and infrastructure is expected to boost growth, have been a beneficiary of investors\u2019 wariness over US exposure.<\/p>\n<p>\u201cThere is more interest in Europe,\u201d said <strong>Joana Rocha Scaff<\/strong>, head of European private equity at New York-based investment firm <strong>Neuberger Berman<\/strong>.<\/p>\n<p>\u201cIt\u2019s more than tariffs. The macro backdrop in Europe has not been more benign than the US but it\u2019s more stable\u2009.\u2009.\u2009.\u2009It\u2019s not just the trade wars but some of the domestic instability [in the US] and proposed tax bills that impact non-US investors.\u201d<\/p>\n<p>Are you rethinking your US exposure? Email me: <a href=\"https:\/\/www.ft.com\/content\/mailto:harriet.agnew@ft.com\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">harriet.agnew@ft.com<\/a><\/p>\n<p>Quant titan Cliff Asness embraces AI<\/p>\n<p>Rage against the machine? Quant titan <strong>Cliff Asness<\/strong> has decided it\u2019s not worth it anymore.\u00a0<\/p>\n<p><strong>AQR Capital Management<\/strong>, the $136bn group he founded 25 years ago, is <a href=\"https:\/\/www.ft.com\/content\/e62c85cb-e3c8-4df3-b115-e3e11eeaa266\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">embracing artificial intelligence<\/a> and machine learning techniques for trading decisions, ending years of reticence from one of the sector\u2019s historic holdouts.\u00a0<\/p>\n<p>The Connecticut-based hedge fund has \u201csurrendered more to the machines\u201d after years of experiments, Asness told my colleagues Costas Mourselas and Amelia Pollard.\u00a0<\/p>\n<p>\u201cWhen you turn yourself over to the machine you obviously let data speak more,\u201d he said.<\/p>\n<p>All quantitative hedge funds \u2014 including <strong>Two Sigma<\/strong>, <strong>Man Group<\/strong>\u2019s <strong>AHL<\/strong> division and <strong>Sir David Harding<\/strong>\u2019s <strong>Winton Capital<\/strong> \u2014 use computing power and algorithms to filter vast amounts of data and then employ sophisticated models to make investing decisions.\u00a0<\/p>\n<p>But AQR has previously been hesitant about removing humans from trading decisions, instead favouring rules-based computer models developed by humans to target explainable market patterns.\u00a0<\/p>\n<p>Despite first investing in broad-based machine learning technology in 2018, AQR has only more recently expanded the strategy beyond stocks to other asset classes, and is now using the technology to determine the weightings given to different factors in a portfolio at any time.\u00a0<\/p>\n<p>The fund also now uses machine-learning algorithms to identify market patterns on which to place bets, even if in some cases it is not entirely clear why those patterns have developed.\u00a0<\/p>\n<p>Read the full interview <a href=\"https:\/\/www.ft.com\/content\/e62c85cb-e3c8-4df3-b115-e3e11eeaa266\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">here<\/a> to find out why the private equity industry has attracted Asness\u2019s ire.<\/p>\n<p>Meanwhile pity the poor quants at Man Group\u2019s AHL. They\u2019ve <a href=\"https:\/\/www.ft.com\/content\/17094dab-b1a5-4cdc-bb48-c78736d2c08c\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">been ordered<\/a> to temporarily return to the office five days a week amid a period of poor performance. It\u2019s to support what the company calls \u201can \u2018all hands on deck\u2019 cross-team research project\u201d. The change applies to about 150 people in London \u2014 just under 10 per cent of the overall group\u2019s 1,700 employees globally.<\/p>\n<p>\u201cYou cannot imagine how badly this has gone down with quants,\u201d said one person familiar with the situation. \u201cThe mood is bad.\u201d<\/p>\n<p>Chart of the week<img decoding=\"async\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/d0f21320-4239-11f0-9c7a-1737297929e6-standard.png\" alt=\"Borrowing costs have not returned to 2025\u2019s lows\u2009.\u2009.\u2009.\u2009but spreads for high-yield bonds retreated in May\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/p>\n<p>US companies with risky credit ratings <a href=\"https:\/\/www.ft.com\/content\/c1bec33a-b466-45d5-b89e-4442dff6a0f7\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">are rushing<\/a> to sell junk bonds ahead of an expected resurgence of trade tensions in July that could depress demand for corporate debt, writes Will Schmitt in New York.<\/p>\n<p>Companies with weaker credit ratings tapped the high-yield bond market for $32bn in May, the most since October, according to data from <strong>JPMorgan<\/strong>. Junk bond sales in the first week of June already have surpassed April\u2019s $8.6bn total.<\/p>\n<p>Bankers and investors say they expect a steady flow of new debt sales the rest of the month and into July while demand remains high and market uncertainty stays relatively low.<\/p>\n<p>But the expiration of the 90-day pause on Donald Trump\u2019s so-called \u201cliberation day\u201d tariffs early next month could set up another surge in uncertainty, echoing the early April ructions that ground the market for new levered debt deals to a halt.<\/p>\n<p>\u201cYou get into these patterns where the market gets into a lull and gets ahead of itself. It feels good now, but it\u2019s setting up for some volatility in July,\u201d said <strong>David Forgash<\/strong>, a portfolio manager at<strong> Pimco<\/strong>.<\/p>\n<p>The extra costs paid by risky corporate borrowers to lenders compared to US government debt, known as spreads, jumped from 3.5 percentage points on April 1 to 4.61 percentage points on April 7, according to <strong>Ice BofA<\/strong> data.<\/p>\n<p>That was the highest level for corporate borrowing costs since May 2023, as investors demanded a higher premium for the added risk they saw following Trump\u2019s April 2 tariff announcement.<\/p>\n<p>As progress appeared to be made in trade negotiations between the US and China, spreads retreated back to the levels experienced in late March. Still, they have not come back to the historically low marks seen in late 2024 and early 2025, when junk bond spreads fell below 3 percentage points.\u00a0<\/p>\n<p>Five unmissable stories this week<\/p>\n<p><strong>Donald Trump<\/strong>\u2019s plans to take public the two finance agencies that buy the majority of mortgages in the US, <strong>Fannie Mae<\/strong> and <strong>Freddie Mac<\/strong>, could generate a <a href=\"https:\/\/www.ft.com\/content\/d6d6298b-d47e-43ef-9047-fbb2e0e21d7e\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">giant windfall<\/a> for two of the president\u2019s most strident billionaire backers: <strong>Bill Ackman<\/strong> and <strong>John Paulson<\/strong>.<\/p>\n<p>Private credit is now so intertwined with big banks and insurers that it could become a \u201clocus of contagion\u201d in the next financial crisis, researchers from <strong>Moody\u2019s Analytics<\/strong>, the <strong>Securities and Exchange Commission<\/strong> and a former top adviser to the Treasury department <a href=\"https:\/\/www.ft.com\/content\/b943a9b4-0ef3-441a-91b6-6a83e7b54d48\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">have warned<\/a>.<\/p>\n<p>Texas <a href=\"https:\/\/www.ft.com\/content\/8b507afa-2cc4-4e3d-b833-249a7ab8df14\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">has removed<\/a> <strong>BlackRock<\/strong> from a blacklist of companies it barred from receiving the state\u2019s investment funds, three years after targeting the asset manager for its environmental policies.<\/p>\n<p>Singapore\u2019s <strong>Temasek, <\/strong>one of the world\u2019s biggest investors, is <a href=\"https:\/\/www.ft.com\/content\/54594076-eea5-4c0d-946c-e05ba7038d3e\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">drastically reducing<\/a> its investments in early-stage companies, because of interest rate rises and following some embarrassing blow-ups for the state-owned fund.\u00a0\u00a0<\/p>\n<p><strong>Scalable Capital<\/strong>, a German investment platform backed by <strong>BlackRock<\/strong>, has raised \u20ac155mn in fresh equity at a valuation of about \u20ac1.5bn, as part of <a href=\"https:\/\/www.ft.com\/content\/a599713f-c467-48ea-a49b-a93d31eaeb3c\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">a push<\/a> to become a pan-European investment powerhouse in the model of <strong>Charles Schwab<\/strong>.<\/p>\n<p>And finally<img decoding=\"async\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/0e13409f-6679-4639-96c2-0b99cc99d3af.webp\" alt=\"\" data-image-type=\"image\" width=\"1200\" height=\"1338\" loading=\"lazy\"\/>The Cha Cha that was Danced in the Early Hours of 24th March 1961 \u00a9 David Hockney, 1961<\/p>\n<p>In 1959, <strong>David Hockney<\/strong> moved from Bradford to begin his studies at the Royal College of Art, London. A <a href=\"https:\/\/hh-h.com\/exhibitions\/40-david-hockney-in-the-mood-for-love-hockney-in-london\/\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">new exhibition<\/a> at <strong>Hazlitt Holland-Hibbert<\/strong> focuses on the love paintings of this period before Hockney moved to the US at the end of 1963.<\/p>\n<p>In the Mood for Love: Hockney in London, 1960-1963<br \/>21 May-18 July 2025<br \/><a href=\"https:\/\/hh-h.com\/\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">https:\/\/hh-h.com\/<\/a><\/p>\n<p>Thanks for reading. If you have friends or colleagues who might enjoy this newsletter, please forward it to them. <a href=\"https:\/\/ep.ft.com\/newsletters\/subscribe?newsletterIds=56b87287f224b50300bf8519\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">Sign up here<\/a><\/p>\n<p>We would love to hear your feedback and comments about this newsletter. Email me at <a href=\"https:\/\/www.ft.com\/content\/mailto:harriet.agnew@ft.com\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">harriet.agnew@ft.com<\/a> <\/p>\n<p>Recommended newsletters for you<\/p>\n<p><strong>The Week Ahead<\/strong> \u2014 Start every week with a preview of what\u2019s on the agenda. Sign up <a href=\"https:\/\/ep.ft.com\/newsletters\/subscribe?newsletterIds=56b1f9c27b2ee603009fd0fe\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n<p><strong>Working It<\/strong> \u2014 Everything you need to get ahead at work, in your inbox every Wednesday. Sign up <a href=\"https:\/\/ep.ft.com\/newsletters\/subscribe?newsletterIds=62039b7ea31d6577a31f70df\" data-trackable=\"link\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Welcome to FT Asset Management, our weekly newsletter on the movers and shakers behind a multitrillion-dollar global industry.&hellip;\n","protected":false},"author":2,"featured_media":169696,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-169695","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114652278121082958","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=169695"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/169695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/169696"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=169695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=169695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=169695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}