Comment and opinion for retail investors in the UK
We are now at the end of the first 6 months 0f 2025 and more significantly, a little under that much into Trump 2.0. What has been the actual impact of the orange one’s political and economic ‘policies’’ on markets? To what extent have our advance calls on the widely anticipated instability and general weirdness that followed the election of Donald J Trump protected our portfolios or better still, left us exposed to new opportunities?
In my earlier post today, I mentioned the 4 old men of the current apocalypse, to adapt St John, and as I wrote the words about at least a couple of them being potentially voted out of office, I felt uncomfortable. It just does not feel like that’s going to happen.
Most people know that if Netanyahu loses office, he will almost certainly go to prison on corruption charges. So he will do anything to stay in power. Trump maybe more ‘Teflon coated’ but no-one is going to argue that he does not want to hang on to power until his dying day.
I think I know how he will at least try to do that.
Sorry, there was no way I could make the title of this piece snappy!
The topic is perhaps one that will not be widely covered, if at all, in the mass media, but it is raising serious alarm bells in the investment industry outside of the USA, and may well have implications for American investors too, as I will explain.
This month I want to offer a primer on the topic of what are loosely called ‘private equity’ and ‘private credit’.
These terms describe rather generally forms of investment that do not fit easily within the framework of existing UK legislation and regulation for retail investors but which forms of investment are currently available to retail investors indirectly, by being included in the assets of products we recognise like pension funds and investment trusts, and which may become more widely available in the near future..
There is definitely something building by way of a story or even a campaign, with vested interests acting a cheerleaders, which narrative might be summarised as suggesting that this form of asset is the new ‘next great opportunity’ and retail investors ought not to be locked out of such a great opportunity by the ‘nanny state’.
As an indication of how the subject is highly topical, especially in the USA, I would refer you to a very recent comment from a Goldman Sachs AM spokesman saying that he could “even see a world where we stop using the phrase public and private; we just say great companies or great credit”.
Now that sounds like a salesman pushing a new product line to the sceptic in me. Such is the general tone of the trade media coverage I am seeing.
I recently watched a webinar from Columbia Threadneedle, the main purpose of which was to promote their UK Equity Income skills, a market segment where the firm has always had a decent reputation with advisers. Columbia is the US based owner but Threadneedle has been around right back into my childhood when my father worked for the then privately owned insurer Eagle Star and Threadneedle was its investment management arm. It went through ownership by British American FS, Allied Dunbar and then Zurich before ending up with Columbia.
The webinar was presented by Jeremy Smith and Dominic Younger and a fair part of it explained their investment philosophy and process which is very much ‘bottom up’. They listed a number of holdings and I was broadly impressed, but this note is not about their fund.
I would not normally expect to be writing this monthly piece as an ongoing running commentary on a single macro economic factor, but the impact of Trump’s presidency on the global economy and investment markets and therefore on our personal wealth is so dramatic and directly relevant that I expect that you would welcome a reasoned opinion on the implications of where we are now, just over 3 months into this global (insert expletive of your choice here).
After the first false dawn, when markets (especially in the USA) were assuming that reduced regulation and a more business climate friendly environment would allow already over valued equities to continue marching upwards, the reality of tariffs calculated by a methodology that was so primitive it was genuinely beyond belief, flip flopping on that and all the rest you know about, has all served to create a climate of uncertainty and what’s more, direct and immediate practical consequences including a supply shock for goods coming out of China. Trump’s 100 day speech, reported the day I publish this article, is said to be full of falsehoods and more of the same bombast.