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Daisy Wu

Global institutional investors and wealth managers are stockpiling cash at the fastest pace on record while quietly retreating from US and UK equities as persistent inflation and mounting geopolitical risks dominate portfolio decisions, according to a report by Marsh Investments.
The institutional investment consultancy polled 430 asset owners managing a combined US$5.76 trillion and found that 37.8 per cent planned to increase cash allocations over the next 12 months, up from just 9 per cent in a similar survey last year.
Net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent – the sharpest year-on-year swing of any asset class in the survey.
United States and United Kingdom equities were the only two asset classes where more investors planned to cut exposure than add, with net allocation intentions falling to negative 10.3 per cent and negative 16.5 per cent, respectively.
“These shifts suggest asset owners are adopting a deliberate barbell position – strengthening downside protection and diversification while retaining flexibility to respond to market opportunities,” Niall O’Sullivan, Marsh’s global chief investment officer, wrote in a report published on Monday.
The survey, conducted in June and July, found that geopolitical risks and inflation were the two most-cited concerns shaping near-term decisions – being considered significant by more than 70 per cent of respondents.
At a media briefing in Hong Kong earlier this month, before the US Federal Reserve’s decision last week to lift its benchmark rate by a quarter of a percentage point, Mike Sebastian, Marsh’s global head of multi-asset investing, said the professional services firm held a “positive near-term view on equities”, supported by strong corporate earnings, though the medium-term picture was less certain.
Private markets have become easier to access but harder to manage well
Garvan McCarthy, Marsh Investments
“In the medium term … you can see there being some volatility there,” Sebastian said, attributing the pressure to geopolitically driven yield moves, rising energy costs and tight credit spreads. He also urged investors to diversify and reassess their exposures.
The survey found that asset owners were positioning themselves for that kind of pressure, with over half the respondents planning to raise infrastructure holdings and nearly half targeting increased exposure to emerging market equities.
This shift away from single-market concentration extended across the Asia-Pacific region, where 53 per cent of investors had adjusted their geographic exposure over the past year, compared with nearly half of respondents globally.
Private markets continued to draw broad engagement, though investors were showing greater restraint. About 44 per cent of respondents reported maintaining their existing commitments while applying stricter selection criteria.
“Private markets have become easier to access but harder to manage well,” said Garvan McCarthy, the firm’s global chief investment officer of alternatives, in the Marsh report.
He added the next phase of investing would favour asset owners who could “pace commitments, maintain underwriting discipline”, and properly assess the impact of individual exposures on overall liquidity and risk.


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Report says net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent in poll conducted in June and July


Report says net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent in poll conducted in June and July.


Geopolitical risks see institutional investors rush to stockpile cash, survey finds

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Report says net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent in poll conducted in June and July

Report says net cash allocation intentions rose 35.5 percentage points to a positive 22 per cent in poll conducted in June and July