Avoiding US Assets: An Investment Shift Driven by Policy Uncertainty

Leading figures in the European private equity market report that numerous top-tier Asian and Middle Eastern investors, including sovereign wealth funds, are increasingly reducing their exposure to US assets. This shift is a response to the policies enacted by the Trump administration and the associated uncertainty surrounding trade and investment.

Executives at Partners Group, a Swiss firm managing over $170 billion in assets, have indicated that some funds are explicitly requesting to avoid any exposure to US assets, citing concerns about potential tariffs, trade restrictions, and other investment limitations.

Roberto Cagnati, Head of Portfolio Solutions at Partners Group, explained that Asian investors are increasingly turning their attention to non-US assets. He noted that investors have become more cautious about their investments, with some large institutions in the Middle East and Asia requesting to open accounts in Euros rather than Dollars, and even to establish custodial accounts in non-US banks as a precaution against potential instability.

Cagnati stated that these discussions began earlier this year, triggered by the policies of the US government. The group clarified that these conversations are occurring with only a select number of clients, including some sovereign wealth funds.

Cagnati believes this trend will lead to further fragmentation of the global financial system and decreased integration, which will have negative economic consequences.

Political and Economic Stability: A Decisive Factor in Investment Decisions

David Layton, CEO of Partners Group, emphasized that political and economic stability are decisive factors in investment decisions. He explained that if investors feel that policies are constantly changing and they are unable to properly assess investments, they will turn to other regions.

Layton believes that the United States is capable of demonstrating stability, but he pointed out that the policies adopted by the new administration have led to "shocks" in the market. He added that these shocks are "normal" under a new administration seeking to implement its political agenda.

Tariffs and Their Impact on Businesses

Wolf-Henning Scheider, Head of Private Equity at Partners Group, indicated that tariffs imposed by the United States on Switzerland will force Breitling, a renowned luxury watch manufacturer, to raise prices in the US market, which will affect its sales.

However, Scheider emphasized that the United States remains an attractive investment destination in four key areas that the group focuses on: Technology, Healthcare & Life Sciences, Industrials, and Services. He explained that the US market is much larger for technology companies, and it is a vast market in healthcare and life sciences.

In conclusion, Scheider affirmed that the United States has not lost its appeal as an investment destination, and the group is focusing more on the performance of major European economies, particularly Germany, which experienced a recession in 2023 and 2024.