Paul Markham is an elite manager responsible for more than $4bn worth of assets at Newton Investment Management — one of eight investment firms under the Bank of New York Mellon umbrella and cumulatively the seventh-largest asset manager in the world with $2trn of assets under management.
As one of the most experienced global equity managers at the firm, Markham is ideally placed to provide an outlook on the effect that the global coronavirus pandemic has had on businesses and on investing.
Markham foresees some significant challenges.
“The basic ability to squeeze all of the income you can out of an asset, in many cases, is going to be very challenged,” Markham told Opto Sessions.
Markham pointed to a number of factors that will have an impact, such as the manner in which people return to offices and the change that this might have on the dynamics of real estate. The banking sector will also be heavily impacted.
“When it comes to actual yields in regards to the yields on securities and equities, in particular, they’re challenged as well because we’ve got big sectors such as the banks that haven’t been told by their regulators they must crimp or suspend the dividends which they’re paying,” Markham explained.
As a result, this will have ramifications on sectors that perform well in the markets.
“If that carries on for a long period of time, the investment cases in some of those areas can become pretty tough for many investors to understand,” Markham explained. “On many levels, yield of assets is going to be a big, big question over the next couple of years”.
For more on Markham’s perspective on fundamental shifts in business and his strategy for investing during this time, listen to the full episode below.
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