2025 EMEA Investment Forum: From Innovate to Activate

The investment environment has been characterized by uncertainty in recent months. At our EMEA Investment Forum in London, investment leaders discussed tariffs and the evolving market backdrop, examined secular megatrends including artificial intelligence (AI) and sustainability, and considered the outlook for public and private markets. Our program was shaped around five themes—innovate, navigate, allocate, collaborate, and activate—to provide a framework for exploring potential opportunities.

Innovate

This year’s Forum opened at the Tate Modern with a focus on innovation. The integration of AI technology into enterprises is currently facing a slower adoption rate despite the emergence of numerous use cases. As AI rapidly advances, corporate leaders are deciding where and how to focus their resources. We believe that some of the most compelling opportunities to invest in AI may be emerging in companies operating in the data and security space.

AI has the potential to significantly enhance and elevate the process of ingesting, digesting, and applying judgment to vast amounts of information. For investors looking to invest with AI and capture uncorrelated returns, speakers agreed that access to alternative data, robust infrastructure, scale, and computing power will be key. Experience and human oversight also remain essential for balancing quantitative insights with qualitative judgment.

World-renowned, award-winning photographer and founder of The People’s Portfolio, Platon, known for his portraits of influential leaders, observed how some tech founders and CEOs believe AI requires a shift in mindset. Business leaders are often characterized by certainty and determination, but the effective implementation of AI demands curiosity, humility, and empathy to make human connections.

“

We’re at the very beginning of the AI revolution. Its impact is momentous, profound, and unfolding at a pace exponentially faster than any other technological shift I've witnessed.”

George Lee

Co-Head of the Goldman Sachs Global Institute, Goldman Sachs

Navigate

On day two of the Forum, industry leaders gathered again at Goldman Sachs' London offices to navigate the economic landscape. In Europe, tariff negotiations and potential impacts on growth and inflation are top of mind. The speed and schedule of European spending plans around defense and infrastructure are also under scrutiny. More broadly, diverging soft and hard macro data, coupled with heightened US policy uncertainty, create a wide range of potential economic and market outcomes.

Speakers acknowledged that modernizing traditional 60/40 portfolios through diversification across assets has proven to be rewarding in a more volatile market backdrop. Private market exposure and both alternative risk premia strategies (both offense and defense) bring unique return profiles and genuine potential diversification benefits. We believe the potential advantages of increased international allocation in equities, bonds, and foreign exchange have come to the fore, while more balanced allocations across asset classes, sectors, factors, and regions promote resilience.

Allocate

We believe that the macro backdrop puts fixed income front and center, with markets acutely focused on the fiscal path forward and future debt dynamics. Investors acknowledged that today's environment requires a flexible approach to navigate the interplay of credit quality metrics, duration, and term premium, among other areas. A live poll revealed the following expectations for rates, growth and fixed income preferences¹in the second half of 2025.

Interest Rate Cuts: A majority of respondents (53%) anticipate two interest rate cuts by the Federal Reserve (Fed). A significant minority (24%) expects one rate cut. Almost a quarter of the audience (23%) foresee no change in the Fed's policy.
Economic Growth: The majority (68%) anticipates economic growth to align with historical averages. A smaller percentage (11%) expects growth to exceed historical averages. A notable portion (23%) expresses concern about a potential recession.
Investment Preferences: Investors are evenly split on where the greatest value lies across investment grade credit, high yield credit, securitized credit, and emerging market (EM) debt.

We observe growing investor demand for private credit, driven by the defensive profile of the asset class, but also the potential attractive real yields available. Increased activity in secondaries is a notable trend as investors explore liquidity options. In private equity, speakers explored how value creation is paramount, and compelling investment opportunities are expected to emerge in the coming years, particularly in private infrastructure aligned with AI, demographics, and sustainability themes.

Wisdom of the Crowd

72%

Plan to increase Alternatives exposure Over next 3-5 years

60%

Plan to increase Active ETF exposure Over next 3-5 years

76%

Cited volatility or new sources of return As top drivers of allocation strategy

Source: Based on134 responses from investment professionals at the 2025 EMEA Investment Forum. As of May 21, 2025. Question 1. 95 respondents, 19% replied neutral, 9% replied decrease. Question 2. 95 respondents, 36% replied neutral, 4% replied decrease. Question 3. 110 respondents. Remaining 24% cited either inflation pressure or liquidity concerns.

Collaborate

Breakout sessions at this year’s Forum included a closer look at active ETFs, broadening equity market opportunities, hedge funds, and outsourced chief investment officer (OCIO) trends, among other topics.

In the equity market, there are many risks to manage going forward as a result of increased volatility due to geo-economic fragmentation and new waves of innovation. However, we believe this new environment is also unlocking exciting potential opportunities across sectors, geographies, and market-caps. Investors acknowledged that combination data-driven insights and underpinned by fundamental analysis will likely be needed to generate alpha. Higher equity-fixed income correlations are, in our view, also reinforcing the case for hedge fund inclusion in portfolios. Skillful manager selection is crucial, given the evolving hedge fund landscape and performance dispersion.

The active ETF market has experienced substantial growth, primarily driven by investor demand for lower-cost, transparent, and efficient investment options that complement existing allocations and provide diversification benefits.² Meanwhile, an increasing number of pension schemes have turned to external specialists for investment management assistance. OCIO and fiduciary management services enable a greater number of pension schemes to delegate tasks such as asset allocation and investment strategy execution to specialized firms, often asset managers. This delegation allows schemes to leverage the external manager's investment expertise while freeing up trustees to focus on strategic planning.

Activate

Investors discussed how the transition to a lower-carbon economy has gained momentum. Understanding the core drivers of this shift empowers investors to identify potential opportunities where rising power demand, resource efficiency, and reindustrialization converge. Actively pursuing climate goals is essential, but how we achieve them matters just as much. As temperatures rise and extreme weather events become commonplace, the focus is on activating adaptation and resilience strategies. This presents opportunities for investment in companies that are actively adapting their business models, becoming more resilient, and developing solutions that enable communities and companies to potentially thrive in a changing climate.

Resilience, Adaptation, and the Pursuit of Opportunity

In an increasingly unpredictable and volatile investment environment, resilience and adapting to changing conditions were overarching themes at this year’s event. Discussions on how to innovate, navigate, allocate, collaborate, and activate strategies highlighted that despite uncertainty, there is no shortage of opportunity. The 2025 EMEA Investment Forum concluded with a discussion with Sir Mo Farah, a decorated Olympic, World, and European champion athlete, who shared his remarkable journey both on and off the track, his winning mindset, and what it takes to adapt and overcome adversity.

“

The ability to overcome challenges can lead to great things. Anything is possible if you work hard, drive forward and are willing to adapt and keep going. ”

Sir Mo Farah

Multiple Olympic, World and European Champion athlete, one of the greatest runners of all time.

¹Based on 134 responses from investment professionals attending the 2025 EMEA Investment Forum. As of May 21, 2025.
²Bloomberg, Morningstar. As of May 21, 2025.

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Risk considerations and disclosures

GLOSSARY

Alpha is the measurement of the difference between a portfolio’s actual returns and its expected returns given its risk level as measured by its beta. A higher alpha is better, but a high alpha is only reliable in the presence of a high R-squared value. It can be viewed as a risk-adjusted measure of return. Some advisors see alpha as a measurement of the value added or subtracted by a fund’s manager. A positive alpha figure indicates the portfolio has performed better than its beta would predict. A negative alpha figure indicates a portfolio has underperformed, given the expectations established by the fund’s beta.

Alternative Risk Premia are multi-asset, quantitatively-driven investment strategies that seek to capture diversified sources of returns.

Correlation is a measure of the amount to which two investments vary relative to each other. Past correlations are not indicative of future correlations, which may vary.

Dispersion describes a range of possible returns for an investment.

Duration can be defined as the weighted-average term-to-maturity of the bond’s cash flows, the weights being the present value of each cash flow as a percentage of the bond’s full prices. The greater the duration of a bond, the greater its price sensitivity. In general, duration rises with maturity, falls with the frequency of coupon payments, and falls as the yield rises (the higher yield reduces the present values of the cash flows). Duration also provides an indication of a bond portfolio’s price sensitivity to changes in interest rates.

Liquidity can be defined as an asset’s ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value.

Secondary investors buy existing ownership stakes in private market funds from other investors.

Transparency: Portfolio holdings are disclosed on a daily basis.

Equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Different investment styles (e.g., “growth” and “value”) tend to shift in and out of favor, and, at times, the strategy may underperform other strategies that invest in similar asset classes. The market capitalization of a company may also involve greater risks (e.g. "small" or "mid" cap companies) than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements, in addition to lower liquidity.

Emerging markets investments may be less liquid and are subject to greater risk than developed market investments as a result of, but not limited to, the following: inadequate regulations, volatile securities markets, adverse exchange rates, and social, political, military, regulatory, economic or environmental developments, or natural disasters.

Infrastructure investments are susceptible to various factors that may negatively impact their businesses or operations, including regulatory compliance, rising interest costs in connection with capital construction, governmental constraints that impact publicly funded projects, the effects of general economic conditions, increased competition, commodity costs, energy policies, unfavorable tax laws or accounting policies and high leverage.

Diversification does not protect an investor from market risk and does not ensure a profit.

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Index Benchmarks

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Date of first use: June 24, 2025