By Yantoultra Ngui
SINGAPORE (Reuters) – Ray Dalio, founder of the world’s largest hedge fund, and Lim Chow Kiat, the boss of Singapore’s sovereign wealth fund GIC, are increasingly cautious in the coming year due to political risks and uncertain global growth prospects.
However, both said on Wednesday they remained committed to investing in China despite challenges such as rising debt problems and geopolitical tensions.
Dalio, founder of Bridgewater Associates, said geopolitical issues and the costs of climate change and its impact on financial markets were among the factors that could create negative risks for global investors in the coming year.
“The surprises are more on the downside than on the upside,” Dalio said at the Milken Institute Asia Summit 2024 in Singapore.
Dalio said that while the US has many positives, there is a risk around an orderly transition of power.
GIC CEO Lim said Singapore’s sovereign wealth fund should be more selective in finding investment opportunities rather than large-scale allocations to major markets.
“The market has priced in a soft landing, which is great. It has also priced in significant growth from the technology sector, so we will be a bit more cautious in that regard,” Lim said, referring to the US. , the largest country exposure with 39% of the portfolio.
The US will remain an important market for GIC regardless of the outcome of the upcoming elections, Lim said, adding that the country has a huge private sector with “a lot of good assets for us to invest in”.
Lim said GIC continues to invest in China, although deal flows are “extremely slow” and the market has low expectations for the country’s growth.
“It may take a while for everything to work, but especially as the second largest economy in the world with great entrepreneurs, it is a place we cannot miss,” he said.
