“We see opportunities in the markets, but also many risks and uncertainty”

“In the current market situation, there are opportunities, especially in alternative investments, but we must be aware that we are still in the middle of the storm, and we will probably continue to face high risk until 2021.” These are some of the reflections shared by José Luis Jiménez, MAPFRE’s chief investment officer, during his participation in the conference “Managing assets for insurers, strategies for navigating the global economic crisis”, organized by the British publication Financial Times.

In the panel, focused on the topic “Choosing the right combination of assets: will the highest-yielding assets be more attractive?”, which was moderated by the FT journalist Katie Martin, and in which also spoke the managing director of Resolution Life Group, Karl Chappell, José Luis Jiménez explained how MAPFRE had to act quickly at the beginning of the crisis in March, to reduce exposure to the most affected sectors. “The hardest part was recognizing that all predictions about the future evolution of the market had ceased to be valid, almost overnight, as a result of the pandemic.”

At the same time, MAPFRE’s chief investment officer has argued that there are still opportunities in the market, especially in alternative investments such as real estate, infrastructure or venture capital vehicles. But also areas that may be experiencing less rational behavior, such as some valuations of technological assets. “As value investors, we think that there may be an upcoming market rotation, in relation to the valuation of some of those assets, and when that happens opportunities may arise.”

In any case, Jiménez has warned about a wide range of factors on which there is not enough visibility to give a reasonable prediction, such as the resolution of the epidemic through the launch of an effective vaccine, Brexit and the threat of an no deal exit for the UK, or the outcome of the US elections. “Our vision is that a Trump victory would be positive for the market in the short term, while a Biden victory would be more beneficial in the medium and long term.”

Finally, he has warned about the social impact that this crisis is going to have on our societies, with elements such as the increase in unemployment, for which it has defended the need for all to continue contributing together to pitch in, as MAPFRE is doing with all the measures that it has approved in recent months to support society in the face of the covid challenge, and in particular in the investment area, with the reinforcement of socially responsible investments as a central element of the asset manager’s strategy.