Investing in a Shifting Economic Climate: The Asia-Pacific Outlook | Global Conference 2025

Panel Composition & Fund Profiles

• Mubadala (Mohammed Al-Bader): A $330 billion UAE sovereign wealth fund with 5 offices globally and 65+ countries invested in.
  • Portfolio allocation: 40% private equity, 25% public equities, 15% real estate/infrastructure, rest alternatives.
  • Geographic split: 30% domestic (UAE), 70% global; 40% of total portfolio invested in the US.
  • Strategy: Differentiated by incubating businesses internally to IPO and co-investing via "unlimited partnership" models rather than traditional LP/GP structures.
• Host Plus (David Allier): One of Australia's largest pension funds ($140 billion AUD) representing 1.9 million workers (12-13% of workforce).
  • Portfolio allocation: 60% quasi-listed/public, 40% unlisted; largely outsourced management.
  • Geographic split: 40% Australia, 60% global (30% US, 3.5% China).
  • Strategy: Maintains an outsourced model, though noting a regional trend toward internalization; heavily exposed to Australian labor and critical minerals sectors.
• Victorian Funds Management Corporation (Kate Galvin): Sub-sovereign fund for the state of Victoria ($93 billion AUD).
  • Portfolio allocation: 42% private markets, 58% public markets.
  • Geographic split: 45% Australia, 55% global (38.5% US).
  • Strategy: 37% of portfolio managed internally; actively hedging US dollar exposure with short USD/long JPY positions amid political uncertainty.
• Danantara (Pandusha Hrier): Indonesia's newest sovereign wealth fund (12 weeks old), consolidating state-owned enterprises (845 companies).
  • Assets under management: ~$1 trillion, ranking #5 globally.
  • Capital source: Dividends from state enterprises ($10-12 billion annually); projected $50-80 billion available for investment over 5 years.
  • Strategy: Focuses on technology transfer and knowledge sharing with GPs; prioritizes Indonesia but seeks regional expansion (e.g., $4 billion co-investment with Qatar Investment Authority).
• TeamSuper (Vas): Pension fund for coal, transport, and energy workers (85 years old, $22 billion AUD).
  • Portfolio allocation: 80% public, 20% private.
  • Geographic split: 45% Australia, 55% global; 45% home bias.
  • Strategy: Not self-managing (55 external managers); recently reduced US MAG-7 exposure by 3.5% to rotate into emerging markets.

Strategic Shifts on the US Market & Political Landscape

• Cautious Optimism: Investors describe current US sentiment as "cautious" due to soft data (confidence) diverging from hard data (labor market strength).
• Institutional Stability Concerns: Long-term investors prioritize stability and predictability, monitoring the current administration's support for US institutions.
• Valuation Rotation: Panels note overvaluation in specific US sectors (notably MAG-7), prompting rotation into private credit, infrastructure, and real assets.
• Productivity & Demographics: Pandu Hrier identifies "brain drain" and declining STEM scores in the US as a critical long-term risk to US innovation and productivity.
• Australia's Political Reset: The recent re-election of the Australian Labor government is viewed positively by pension funds for ensuring superannuation preservation rules and energy transition clarity.

Asia-Pacific Investment Thesis & Allocation Trends

• Demographic Drivers: Mubadala views demographics as destiny, targeting India (6-7% GDP growth) and China (post-deal recovery) while addressing aging populations in Japan/Korea via healthcare/nursing sectors.
• Targeted Expansion: Mubadala plans to increase Asia-Pacific exposure from 13% to 25% over the next 5-10 years.
• China Exposure: While direct equity exposure remains low (e.g., 3.5% at Host Plus), Australian funds maintain high indirect exposure via mineral exports and tourism; "China Plus One" strategies are driving interest in Vietnam, Indonesia, and Southeast Asia.
• Indonesia's Growth: Danantara highlights Indonesia's 5% economic growth, low inflation (<2%), political stability (85% president popularity), and low leverage (40% debt-to-GDP) as key investment pillars.
• Frontier Markets: Host Plus plans to enter frontier markets (Bangladesh, Kazakhstan) via active managers seeking high-conviction opportunities.

Currency Management & Dollar Strategy

• Hedging Approaches: Host Plus maintains a currency overlay program hedging ~25% of international exposures; Victorian FMC is increasing hedging of US dollar assets after a long period of being unhedged.
• Reserve Currency Status: Despite signs of US dollar weakening and treasury devaluation, no panelist believes the dollar will lose reserve currency status immediately; alternatives (e.g., RMB, CNY) are not yet at scale to replace it.
• Natural Hedges: Danantara notes natural hedges via US-dollar-denominated revenues from oil and gas sectors, mitigating immediate impact of currency shifts.

Geopolitical Risk Assessment

• US-China Relationship: Panelists identify the US-China relationship as the single biggest geopolitical risk, noting their symbiotic role (China = manufacturing, US = consumption) and the potential global fallout if this dynamic fractures.
• Human Error Risk: Host Plus CEO highlights the risk of "silly mistakes" or misunderstandings between defense ministers as a primary trigger for conflict.
• Worst-Case Scenario Planning: Danantara emphasizes the "astaghfirullah case" (worst-case scenario) planning, specifically flagging the non-zero probability of conflict in Taiwan.
• Regional Stability: Southeast Asia (Indonesia, Vietnam) is viewed as a rare zone where both US and Chinese interests can coexist and profit.

Guidance for Long-Term Investors

• Time Horizon: Investors are advised to maintain multi-decade horizons, noting that political turmoil is historically rewarded by market resilience.
• Valuation Discipline: Focus on buying cash-flowing assets at reasonable prices, adhering to the principle that "markets can stay irrational longer than you can stay liquid."
• Volatility as Opportunity: Leaders urge embracing volatility rather than fleeing it, as it separates competent investors from those who pivot incorrectly.
• Diversification: Described as the "only free lunch," with a continued push for geographic and asset class diversification to mitigate concentration risks.
• Liquidity Management: Danantara plans to remain highly liquid despite capital inflows to deploy slowly and only when specific high-conviction opportunities arise.