Investors are starting to question if they’ve allocated too much money to the US, according to Goldman Sachs Group Inc. Vice Chairman Robert Kaplan, as many financial firms are eyeing Europe and Asia for growth.
Some investors are asking if they should start hedging the dollar to protect against currency fluctuations, but remain “excited” about the US as a place to invest, Kaplan said at the University of Texas at Austin’s Energy Symposium on Friday.
“What happened since January is people are still excited about the US but they’re saying: ‘I think we’re over allocated to the US’,” Kaplan said. “We’re having hedging conversations around the world with people who haven’t hedged dollar in 15 years.”
The dollar weakened in August after posting its best month this year, as investors prepared for a slowing US economy and interest-rate cuts even as inflation continues to advance.
While investors still see the US as a safe place to park their money, “there’s a little bit more confusion about the institutional framework in the US,” he said.
“If you’re sitting in the US, you might fairly conclude the world is deglobalizing,” Kaplan said. “I will tell you, I don’t think it is. It’s not deglobalizing. Globalization is continuing and as I told you, it’s continuing aggressively.”
Other countries, including India, Canada and China, are recognizing the need for global partnerships, he said, especially as these nations grapple with high debt loads and costs.
However “the US is not in the middle as much of those conversations as we would’ve been just a year ago.” he said.
As volatility has marred US markets this year, many banks and investment firms have said investors are likely to flock to Europe and Asia to invest in areas such as infrastructure or defense.
The chief executive officer of CVC Capital Partners Plc, one of Europe’s largest private capital firms, recently said he expects investor interest in the region to remain elevated, especially as limited partners seek diversification away from the US.
Blackstone Inc. CEO Steve Schwarzman has said the firm is planning to invest as much as $500 billion in Europe over the next 10 years, highlighting its growing appeal to investors.
In August, Trump criticized Goldman Sachs CEO David Solomon, saying the bank made a “bad prediction” about the effects of sweeping US tariffs on markets and consumer costs, following a research note by Goldman economists that said US consumers will bear the brunt of Trump’s tariff agenda.
This article was generated from an automated news agency feed without modifications to text.
