Journal for Policy & Market Research

I. Executive Summary and Strategic Thesis

1.1. Core Strategic Thesis: Navigating Divergence and Structural Risk

The global investment landscape in 2025 is defined by a critical tension: the “tenuous resilience” of global economic growth set against a backdrop of increasing macroeconomic and geopolitical divergence.[1] While global growth is projected to stabilize between 3.0% and 3.3% for 2025–2026, primarily buoyed by specific momentum within the United States and selective fiscal expansion, this resilience is inherently fragile.[2, 3] Investors face an environment where two structural challenges have normalized: the persistent, high-impact threat of geopolitical conflict and a profound divergence in global monetary policy.[4, 5]

The established consensus projection for substantial monetary policy easing is directly challenged by institutional research that anticipates core inflation will remain sticky (near 3%), leading to a “High-for-Real-Long” interest rate narrative for the Federal Reserve and most Emerging Market central banks.[5] This policy divergence fundamentally reshapes asset allocation strategies.

Consequently, the strategic imperative for institutional capital allocators is to actively shift portfolios away from purely momentum-driven strategies and towards factors emphasizing Quality, Resilience, and non-correlated assets. Success in 2025 depends on the sophisticated leveraging of regional policy and economic divergences to generate alpha and strategically manage escalating systemic risks.

1.2. Key Findings Summary (2025/2026 Outlook)

• Growth & Policy Headwinds: Global growth is projected to remain below the historical average of 3.7%.[3] The near-term outlook is characterized by divergent paths, while medium-term risks are tilted to the downside due to elevated central bank rates and geopolitical tensions.[2, 3] The key macroeconomic tension is the structural high-rate environment, predicated on the end of goods disinflation and persistent service price stickiness.[5]

• Systemic Risk: Geopolitical conflict is cemented as the paramount systemic risk, cited by 61% of institutional investors, driving structural risk premiums into safe-haven assets such as gold.[4, 6] Geoeconomic fragmentation introduces complexity via politicized technology landscapes and divergent regulatory environments.[7]

• Public Allocation Strategy: Strategic overweight positions are warranted in sectors that benefit from the current macro environment, including Financials (capitalizing on widening net interest margins), Healthcare (driven by breakthrough therapies and non-cyclical demand), and select Small-Cap and Emerging Market equity exposures that offer attractive valuations.[8]

• The Alternatives Bifurcation: The private capital market remains bifurcated. While institutional investors signal a readiness to deploy cash, core Private Equity (down 32.3%) and Venture Capital (down 42.5%) fundraising continues a protracted decline due to high financing costs and exit stagnation.[4, 9] In contrast, Private Credit and Infrastructure remain highly favored and Secondaries have emerged as a critical, high-growth tool for portfolio liquidity management, posting a 22% increase in fundraising.[9, 10]

• Thematic Opportunities: Artificial Intelligence (AI) serves as the primary structural growth catalyst, driving productivity enhancements across sectors, enabling resilience in Healthtech [11], and providing a technological edge for integrating Environmental, Social, and Governance (ESG) principles into quantitative risk modeling.[12]

II. Global Macroeconomic and Policy Landscape: Tenuous Resilience and Policy Divergence

2.1. Global Growth Trajectory and Underlying Drivers

Global economic growth forecasts for 2025 are projected to stabilize in the range of 3.0 percent to 3.3 percent.[1, 2, 3] This modest rate remains notably below the historical average growth rate of 3.7 percent recorded between 2000 and 2019.[3] The near-term outlook is characterized by divergent paths, where an upward revision in the United States has largely offset downward revisions in other major global economies.[2, 3]

The resilience demonstrated by the U.S. economy is attributed to several specific drivers, including generally better financial conditions, targeted fiscal expansion in major jurisdictions, and a unique behavioral factor: the “front-loading ahead of tariffs”.[1] This front-loading activity—where businesses accelerate purchasing or inventory build-up in anticipation of future trade barriers—is an essential consideration. The acknowledgement that current growth is partially driven by this mechanism implies that the current activity levels may be artificially inflated. Economic momentum, therefore, risks fading sharply in late 2025 or 2026 once these anticipated tariffs are implemented or supply chain shifts are completed. This structural distortion necessitates a conservative approach to equity valuations that depend heavily on the sustained, unmoderated continuation of near-term revenue growth.

Downside risks to the medium-term outlook remain tilted unfavorably. Elevated central bank rates, implemented to fight inflation, and the ongoing withdrawal of fiscal support amid high global debt levels continue to weigh on economic activity.[2] Furthermore, persistent high policy uncertainty and escalating trade tensions compound these financial constraints.[2] Indeed, the IMF has explicitly highlighted that restoring “confidence, predictability, and sustainability remains a key policy priority”.[1] When policy unpredictability is structurally elevated—as seen with potential tariff implementation and the impact of 2024 election outcomes [7]—institutional capital deployment slows, even when cash reserves are high.[4] This prolonged uncertainty contributes directly to suppressed corporate mergers and acquisitions (M&A) and protracted fundraising challenges across high-growth, illiquid asset classes.[9]

2.2. The Inflation and Interest Rate Conundrum

Disinflation has progressed faster than anticipated in most regions due to unwinding supply-side issues and restrictive monetary policy.[2] Global headline inflation is generally expected to fall to a range of 4.2 percent to 5.8 percent in 2025.[2, 3] However, this progress is complicated by the stickiness of services inflation, which is holding up progress on disinflation and increasing the prospect of “higher for even longer interest rates”.[2] US inflation, specifically, is predicted to remain above target.[1]

This macro tension forms the basis for a significant institutional divergence from the prevailing consensus. While central banks and private forecasters generally anticipate core CPI inflation approaching 2% and substantial monetary policy easing, J.P. Morgan research presents an alternative narrative.[5] Their baseline forecast anticipates core CPI inflation remaining sticky, close to its current 3% level, and consequently, projecting limited easing in the aggregate.[5]

The rationale for this “High-for-Real-Long” view is structural. It is predicated on two main elements: first, the goods price disinflation impulse has largely ended; and second, there is no anticipated macroeconomic backdrop that supports a sustained return of service price inflation to pre-pandemic norms without triggering a sharp recession.[5] This persistent inflation floor mandates that investors prepare for structurally elevated financing costs. High interest rates are not merely a macro statistical footnote; they translate directly into more expensive leverage, which fundamentally weighs on private equity company valuations and exerts specific pressure on lower quality borrowers in private credit and real estate sectors.[13]

Table I below summarizes the divergent outlook:

Table I: Global Economic Forecasts and Policy Divergence (2025-2026)

Indicator	2025 IMF Projection (Jan/Jul Update)	2026 IMF Projection	Key Policy Divergence/Risk	Relevant Snippets
Global Growth	3.0% – 3.3%	3.1% – 3.2%	US growth offset; Risks tilted to the downside mid-term.	[1, 2, 3]
Global Headline Inflation	4.2% – 5.8%	3.5% – 4.4%	US inflation predicted above target; Services inflation sticky.	[2, 3]
Policy Rate Outlook	Divergent Easing Path	High-for-Real-Long	Western Europe easing below 2%; Fed/EM central banks limited action (JPM view).	[5]

2.3. Monetary Policy Divergence and Regional Risk

A key theme of the outlook is the divergence among central banks.[5] The powerful global impulses that promoted policy synchronization in prior years are expected to fade.[5] This disparity creates unique challenges and opportunities across regions.

Western Europe is projected to be the policy weak link, where euro area policy rates are forecast to fall below 2%.[5] This relatively aggressive easing trajectory contrasts sharply with the expected limited action from the Federal Reserve and most Emerging Market central banks, which supports the overall high-for-real-long narrative for global capital markets.[5]

This substantial regional disparity in monetary policy necessitates a sophisticated and active currency and interest rate strategy. If the Euro area eases below 2% while the Fed maintains a higher floor, increased currency volatility is inevitable. Such regional divergence mandates the implementation of explicit currency hedging strategies for global portfolios. Furthermore, it reinforces the investment appeal of select international markets where policy rates are falling, providing much-needed relief to local leveraged sectors, versus US markets where the policy constraint on capital costs remains tight. Policy management must prioritize balancing trade-offs between inflation containment and supporting real economic activity while also rebuilding diminished fiscal and financial buffers.[3]

III. Systemic Risk Overlay: Geopolitics, Fragmentation, and Strategic Risk Management

3.1. Geopolitical Conflict: The Structural Risk

Geopolitical conflict has transitioned from being a cyclical risk factor to a structural, persistent threat within investment models. It is unequivocally the dominant systemic risk, cited by 61% of institutional respondents as their greatest concern, significantly outpacing worries over political instability (39%) and economic recession (38%).[4]

This heightened concern stems from deep structural shifts. KPMG identifies key drivers, including tectonic shifts in power, economic centers, and trade, alongside the decay of international institutions.[7, 14] The intensifying U.S.-China strategic competition remains a centerpiece of global risk.[7] These dynamics are redefining global power balances through the formation of new trade alliances and investment hubs.[7, 15]

The complex nature of modern risk requires an elevated, strategic approach to management. Chief Risk Officers (CROs) have sharply increased the prioritization of geopolitical risks.[16] This is because the risks rarely occur in isolation; instead, they behave like “multi-variable shocks” where a single trigger—such as sanctions or military conflict—rapidly cascades across multiple dimensions, potentially causing inflation spikes, supply-chain shocks, financial market volatility, and systemic operational resilience failures.[16, 17] Managing this environment demands embedding risk awareness into culture and governance, shifting modeling away from static correlation analysis toward dynamic, scenario-based stress testing that simultaneously integrates operational and financial consequences.

3.2. Geoeconomic Fragmentation and Sectoral Impact

Geoeconomic fragmentation manifests through increased regulatory complexity and a politicized technology landscape. The regulatory and tax environment is complex, fragmented, and evolving at different speeds globally. While the minimum global tax is adopted by many countries, others are withdrawing from multilateral tax policy, increasing compliance burdens and operational friction for multinational corporations.[7, 15]

Concurrently, the technology landscape is fast-moving and increasingly politicized. Shifting alliances based upon national security concerns, coupled with fragmented regulations, add significant complexity to technology investment decisions.[7] For instance, the emergence of new Generative AI (Gen AI) players is challenging US dominance, embedding geopolitical tension directly into the TMT sector.[7]

This fragmentation creates a differential impact across industries. A sectoral heat map analysis highlights varying degrees of exposure to the top five geopolitical risks for 2025.[7] Sectors such as Technology, Media & Telecom (TMT) and Energy, Natural Resources & Chemicals face high exposure to tectonic shifts in power and multiple threats to supply chains, assets, and infrastructure.[7] Industrial Manufacturing & Automotive and Financial Services also face significant, multi-faceted risks.[7] Conversely, sectors like Life Sciences may experience a more limited, but still present, impact.[7] Corporations are responding by reshaping end-to-end supply and value chains and exploring new investment sources in adapting to these regional alliances.[15]

3.3. Hedging and Portfolio Resilience

Given the structural nature of geopolitical risk, portfolio construction must integrate strategic hedging assets. Gold, in particular, has seen its geopolitical risk premiums solidify as structural features of its valuations, rather than temporary event-driven spikes.[6] The sustained frequency and magnitude of international tensions have created persistently elevated baseline risk levels, supporting precious metals demand across diverse geographic regions.[6]

This confirms Gold’s relevance as a non-correlated crisis hedge and an independent store of value, providing necessary protection against currency wars, competitive devaluation risks, and trade-related monetary distortions.[6] This requires investors to view gold not merely as a tactical cyclical trade, but as a permanent monetary anchor within a fragmented system.

Beyond precious metals, maintaining exposure to Oil is strategically warranted.[8] Although oil prices were soft earlier in 2025, supply discipline from OPEC+ and improving global demand, coupled with persistent geopolitical risks in the Middle East and Eastern Europe, continue to pose upside threats.[8] Allocations to Oil and Gold/Silver therefore serve as an integrated dual hedge against both inflation and geopolitical volatility.[8]

IV. Strategic Asset Allocation and Public Markets

4.1. Institutional Positioning and Cash Conversion

Institutional sentiment indicates a clear readiness to strategically deploy capital into risk assets. Family offices, often regarded as agile capital allocators, signal their preparedness to act, with more than one-third of respondents planning to reduce their current cash balances (12%).[4]

Looking ahead, while investors expect to maintain stable strategic allocations, selective shifts are planned to balance patience with emerging opportunities.[4] Specifically, 38% of respondents expect to increase allocations to public equities, signaling confidence in long-term growth prospects, while 39% expect to increase allocations to private equity, albeit at a potentially slower pace.[4] The capital markets environment of 2025 requires active management to capture this deployment intent.

Table II: Strategic Asset Allocation and Institutional Intentions (2025 Focus)

Asset Class/Style	Current F/O Allocation	Planned Change in Allocation	Strategic Rationale/Driver	Relevant Snippets
Public Equities (Total)	31%	38% plan to Increase	Confidence in long-term growth and corporate profits.	[4, 13]
Alternatives (Total)	42%	Stable/Selective Increases	Seeking non-correlated returns and specialized yields.	[4, 8, 10]
Private Equity	Included in Alternatives	39% plan to Increase (Slower Pace)	Steady programmatic commitments; reliance on AI to boost productivity and exits.	[4, 13]
Private Credit	Included in Alternatives	26% plan to Increase (>50% bullish)	Appetite for yield and bespoke financing solutions; bank regulatory retreat.	[4, 10]
Cash Balances	12%	>33% plan to Reduce	Readiness to redeploy capital into risk assets.	[4]

4.2. Public Equity Strategy (Q4 2025 Outlook)

Global equity markets demonstrated resilience through 2025, with major indices posting moderate gains.[8] The strategic guidance for the remainder of the year warrants specific overweight positions.[8]

Overweight Rationale:

1. Financials and Banks: Financial stocks are well-positioned to benefit from the sustained high-rate outlook [5], which supports widening net interest margins. The sector also benefits from improved asset quality and potential consolidation activity.[8]

2. Healthcare: The sector, particularly in the U.S., has presented a mixed picture, with biopharmaceuticals rallying due to breakthrough therapies and strong demand, but other areas lagging.[8] Selective opportunities exist, making an overweight position warranted, capitalizing on non-cyclical demand and high innovation.[8]

3. Small-Cap and Micro-Cap: Opportunities persist in the smaller segments of the market. In the early phase of a cyclical shift to smaller companies, these allocations are expected to weather tariffs more effectively and benefit disproportionately from any eventual lower interest rate environment.[8]

4. Select International and Emerging Markets: International markets have generally outperformed domestic counterparts, supported by currency translations.[8] Renewed growth in major economies like China and India, alongside strong export demand in Southeast Asia, boosts emerging market returns. Attractive valuations in select Asian economies support investment opportunities, though political risks and currency fluctuations must be actively managed.[8]

Underweight Rationale: Given the volatile environment and the structural interest rate constraints, the strategy advises underweighting momentum and high-valuation sectors, favoring factor tilts toward Quality and Value.[8, 18]

4.3. Fixed Income and Duration Management

Interest rate dynamics remain central to fixed income strategies.[8] The core strategy must prioritize high-quality sovereign debt and investment-grade credit, given the pressure placed on lower quality borrowers by sustained high financing costs.[8, 13]

Active management of duration risk is critical, especially considering the potential for policy-generated disruptions to the disinflation process, which could interrupt any planned monetary easing pivot.[3]

For yield enhancement, investors should consider Emerging Market debt.[8] Improving fundamentals in select emerging markets support these opportunities.[8] In Europe, fixed income strategies should emphasize high-quality sovereign and corporate debt, aligning with the regional expectation of policy rates falling below 2%.[5, 8] Value can also be found in Asian sovereign and corporate bonds.[8]

V. Deep Dive: The Alternatives Market Frontier

The alternatives sector represents 42% of portfolios for participating institutional investors, confirming its role as a key source of non-correlated returns.[10] However, this segment is experiencing a significant bifurcation, characterized by a protracted slump in core private capital fundraising coexisting with surging demand for liquidity solutions and specialized credit.

5.1. The Protracted Private Capital Fundraising Slump

The private equity industry is navigating its fourth consecutive year of fundraising decline.[9] Based on trailing fourth-quarter metrics, the total capital gathered ($1.24 trillion) represents a 23 percent year-over-year decline.[9]

Venture Capital (VC) has fared the worst among the private markets, experiencing a 42.5 percent decline over the past 12 months, raising only 140.4billion.[9]CorePrivateEquityfundraisingdeclinedby32.3percent(440 billion), while Private Credit funds saw a nearly 17 percent decline ($218 billion).[9] The weakness is characterized by a reduction in both the number of funds closing and the amount of capital raised.[9]

This slump is directly linked to the macroeconomic environment. The “high-for-long” interest rate narrative increases the cost of capital, making leverage more expensive and weighing heavily on private equity valuations.[13] This pressure suppresses M&A and IPO activity, leading to large exit backlogs and insufficient distributions for Limited Partners (LPs) to make re-up commitments to new funds.[9] Furthermore, securing commitments to meet fund target sizes is proving increasingly difficult, with the average time for general partners to close a new VC fund reaching a record 17.5 months.[9]

5.2. Resilience and Growth in Private Credit and Infrastructure

In stark contrast to the core PE/VC sectors, specific alternatives remain highly attractive. Private credit continues to expand globally, driven by a strong institutional appetite for yield and bespoke financing solutions.[4, 19] Over half of institutional respondents are bullish on private credit, with 26% intending to increase allocations.[4] Although high financing costs put pressure on lower quality borrowers, the sector benefits from an improved risk profile and the ongoing regulatory retreat of traditional banking institutions, which opens up new avenues of finance.[13, 19]

Infrastructure is also viewed bullishly, with nearly one-third of family offices citing plans to increase allocations.[10] Infrastructure acts as a key, defensible, long-term asset class. Its structural appeal is currently enhanced by its direct linkage to the Artificial Intelligence theme, allowing investors to access the transformative possibility offered by AI through investments in essential underlying infrastructure, such as data centers and energy supply chains.[19]

5.3. The Structural Shift to Secondaries and Liquidity Management

The only positive trends in fundraising over the past year were in secondaries and co-investment funds, which posted increases of 22 percent and 24 percent, respectively.[9] Secondaries are on track for a record-breaking fundraising year in 2025, having practically matched the prior year’s record.[9]

This growth is indicative of a fundamental change in portfolio management strategy. Secondaries have transitioned from a niche strategy, used primarily for offloading distressed fund stakes, to becoming “firmly established as a key tool for portfolio management” in private capital allocations.[9] The surge in secondary activity directly addresses the inverted liquidity function in private markets. Given the prolonged exit slump, LPs can no longer rely on General Partner (GP) exits for liquidity. The high growth in secondaries confirms that institutional investors are proactively utilizing these markets to unlock trapped capital and strategically optimize their exposures, rather than passively waiting for primary exit activity to resume.

Furthermore, with high interest rates restricting the financial lever (debt) traditionally used to drive private equity returns [13], future returns must rely heavily on operational efficiency. The expectation of AI-driven productivity advancements is crucial here, as it is expected to boost corporate profits, reinvigorate M&A, and drive better distributions across private equity portfolios.[13, 19] This requires fund managers to successfully implement deep AI integration across their portfolio companies to mitigate the pressure from persistent high financing costs.

Table III: Private Market Fundraising Metrics and Trends (2025)

Private Capital Strategy	Fundraising Decline YoY (Trailing Q4 2025)	Capital Raised (Approx.)	Institutional Conviction (Allocation Intent)	Key Driver/Trend
Venture Capital (VC)	42.5% Decline	$140.4 Billion	Low	Severely impacted by exit bottlenecks and long closing periods (17.5 months).
Private Equity (Core)	32.3% Decline	$440 Billion	Stable/Selective Increase	Pressured by high leverage costs; dependent on AI productivity lift.
Private Credit	17% Decline	$218 Billion	High (26% plan to increase)	Expansion globally, yield enhancement, bespoke finance solutions.
Secondaries	22% Increase	$122.6 Billion	High	Established tool for liquidity and strategic portfolio management.

VI. Thematic Investment Opportunities: AI, Healthtech, and Climate Resilience

6.1. Artificial Intelligence: The Productivity and Investment Catalyst

Artificial Intelligence (AI) represents the most significant structural growth theme, expected to serve as a productivity and investment catalyst across the global economy. AI-driven productivity advancements are broadly expected to boost corporate profits and confidence over the next few years, creating supportive conditions for capital market activities like IPOs and M&A.[13]

The integration of AI is already reshaping essential sectors. In finance, AI is poised to revolutionize Environmental, Social, and Governance (ESG) investing.[12] Through comprehensive data analysis, risk assessment, and opportunity identification, AI enables investors to optimize portfolio performance.[12] This capability allows capital allocators to move beyond general ethical screening to the systematic, quantified risk management of environmental, social, and governance shocks, identifying emerging risks and opportunities faster and with more accuracy than traditional methods.[20] This technological sophistication transforms ESG compliance into a competitive advantage for generating superior, risk-adjusted returns.

However, investment in AI-centric companies must be contextualized within the volatile geopolitical environment. The politicized technology landscape and shifting alliances based on national security concerns add complexity.[7] The emergence of new Gen AI players challenges established US dominance [7], meaning AI-related investments carry an embedded geopolitical risk premium regarding intellectual property protection, supply chain vulnerability, and market access.

6.2. Healthtech Innovation and Investment Stabilization

The healthtech sector presents compelling opportunities driven by urgent structural demand. Per capita healthcare costs in the U.S. have tripled since 2000, while persistent workforce shortages and access barriers exacerbate industry pain points.[11]

Technology solutions are now critical, ranging from digital health platforms expanding care access to AI-powered improvements in administrative and clinical workflows.[11] AI is moving beyond potential clinical change to become a valuable tool working behind the scenes to address these long-standing operational challenges.[21]

Crucially, despite general macro headwinds and the sharp decline in overall Venture Capital fundraising [9], venture funding in healthtech has stabilized at a substantial 25–30 billion annually.[11] This relative resilience, alongside stable exit activity noted in 2025, suggests that healthtech remains a favored category for investors due to its non-cyclical, high-impact demand characteristics.[11]

6.3. Climate Resilience Technology: From Ethics to Hard Risk Mitigation

Investment in climate resilience technology has reached an inflection point, shifting focus towards mature solutions with the potential for material adoption by 2030, emphasizing customer-validated performance and business model maturity.[22]

This investment is increasingly viewed as essential hard risk mitigation for assets and supply chains. Capital is flowing into critical areas of adaptation, such as off-grid water harvesting, tech-enabled agriculture supply chains, and specialized AI satellite monitoring for drought forecasting.[22, 23] AI strengthens resilience to climate impacts by improving long-term adaptation strategies, enabling governments and communities to manage and mitigate risks more effectively.[23]

Specific venture firms are focusing exclusively on climate-related risks, such as wildfire prevention, risk mitigation, suppression, and recovery.[22] This targeted investment confirms that climate resilience has become an integrated category for strategic portfolio defense and asset protection, driving growth and sustainability across value chains.[23]

VII. Concluding Strategic Recommendations and Portfolio Construction

7.1. Factor Investing and Portfolio Resilience

Factor investing, which targets persistent drivers of risk and return, must be actively employed given the cyclical nature of market conditions.[18, 24] The current macro environment—characterized by geopolitical uncertainty, sticky core inflation, and a high-for-real-long policy outlook—demands specific factor tilts.

The analysis warrants an overweight allocation toward strategies embodying Quality (stable earnings, low leverage, strong cash flow) to mitigate downside risk in a potentially volatile, debt-constrained environment. Simultaneously, an overweight to Value is recommended to position the portfolio for cyclical upside potential during eventual policy shifts or economic normalization periods.[18] Conversely, underweighting momentum and high-valuation growth stocks remains prudent until decisive, aggregate monetary policy easing is established.[8]

The elevated potential for volatility and divergent fiscal/monetary policy paths globally means that actively managed strategies, such as select hedge funds, are strategically well-positioned to navigate and capitalize on market dislocations.[13]

7.2. Actionable Mandates for Institutional Allocators

Based on the synthesis of global macro, risk overlay, and asset class analysis, the following three actionable mandates are critical for institutional allocators in 2025:

1. Exploit Monetary Divergence and Manage Liquidity Risk: The policy divergence theme must be leveraged regionally. Overweight Financials in public equities to capitalize on U.S. net interest margins, and utilize specific Emerging Market debt (particularly in Asia) for yield where fundamentals are improving.[5, 8] In fixed income, maintain a preference for investment-grade credit and manage duration risk actively.[8] Crucially, utilize the Secondaries market as a sophisticated tool to manage illiquid capital, unlocking trapped value in private equity and venture capital exposures without relying on primary market exits.[9]

2. Institutionalize Geopolitical and Fragmentation Hedges: Acknowledge geopolitical risk as a structural, permanent feature of the investment landscape. Convert gold exposure from a tactical position to a long-term monetary anchor to hedge against fragmentation, currency manipulation, and trade-related distortions.[6] Integrate technology investments focused on physical asset resilience, such as climate resilience technology, as a strategic defense against supply chain shocks and operational failures.[22]

3. Capitalize on Structural Growth via Proxies: Invest in Artificial Intelligence (AI) primarily through defensible, long-duration proxies that benefit from, but are not solely dependent upon, near-term growth expectations. This includes Infrastructure (data centers, compute power, energy supply) and Healthtech (operational efficiency, administrative workflows).[11, 19] Simultaneously, utilize AI-driven quantitative analysis to systematically integrate ESG factors, enhancing risk-adjusted returns by identifying and mitigating environmental, social, and governance shocks with greater precision.[12, 20]

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1. World Economic Outlook Update, July 2025: Global Economy …, https://www.imf.org/en/publications/weo/issues/2025/07/29/world-economic-outlook-update-july-2025

2. World Economic Outlook – All Issues – International Monetary Fund, https://www.imf.org/en/publications/weo

3. World Economic Outlook Update, January 2025: Global Growth: Divergent and Uncertain, https://www.imf.org/en/publications/weo/issues/2025/01/17/world-economic-outlook-update-january-2025

4. Goldman Sachs Releases 2025 Family Office Investment Insights Report, https://www.goldmansachs.com/pressroom/press-releases/2025/2025-family-office-investment-insights-report-press-release

5. Market Outlook 2025 | J.P. Morgan Research, https://www.jpmorgan.com/insights/global-research/outlook/market-outlook

6. Key Forces Behind Gold’s Remarkable 2025 Market Performance, https://discoveryalert.com.au/monetary-policy-gold-2025-bull-run/

7. Top geopolitical risks 2025 – KPMG agentic corporate services, https://assets.kpmg.com/content/dam/kpmgsites/sa/pdf/2025/top-geopolitical-risks-2025.pdf

8. Comerica Q4 2025 Investment Outlook | Comerica, https://www.comerica.com/insights/investment-insights/market-outlook/comerica-q4-2025-investment-outlook.html

9. Private Equity Fundraising Remains Glum, Four Years On …, https://www.institutionalinvestor.com/article/private-equity-fundraising-remains-glum-four-years

10. 2025 Global Family Office Report | BlackRock, https://www.blackrock.com/institutions/en-global/institutional-insights/thought-leadership/global-family-office-survey

11. 2025 Healthtech Trends – J.P. Morgan, https://www.jpmorgan.com/insights/markets-and-economy/outlook/2025-healthtech-trends

12. Artificial Intelligence in ESG investing: Enhancing portfolio management and performance – International Journal of Science and Research Archive, https://ijsra.net/sites/default/files/IJSRA-2024-0305.pdf

13. Alternatives 2025 Outlook | J.P. Morgan Asset Management, https://am.jpmorgan.com/us/en/asset-management/institutional/insights/portfolio-insights/alternatives/alternatives-outlook/

14. Global Trends 2025: A Transformed World – DNI.gov, https://www.dni.gov/files/documents/Global%20Trends_2025%20Report.pdf

15. Top geopolitical risks 2025 – KPMG agentic corporate services, https://assets.kpmg.com/content/dam/kpmg/lu/pdf/geopolitics-top-risk-2025-executive-summary.pdf.coredownload.pdf

16. 14th annual EY/IIF global bank risk management survey, https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/insights/banking-capital-markets/documents/ey-and-institute-of-international-finance-bank-risk-management-survey-02-2025.pdf

17. Future Finance Leaders 2025: Five Themes Shaping the Next Era of Finance and Treasury, https://www.jpmorgan.com/insights/banking/five-themes-future-finance-leaders-2025

18. How is factor investing key to a stable investment portfolio? | J.P. Morgan Private Bank U.S., https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/how-is-factor-investing-key-to-a-stable-investment-portfolio

19. 2025 Private Markets Outlook – Institutional – BlackRock, https://www.blackrock.com/lu/intermediaries/themes/private-markets-outlook

20. A guide to sustainable portfolio management in the AI era – Manifest Climate, https://www.manifestclimate.com/blog/sustainable-portfolio-management/

21. 2025 Healthcare Industry Trends Report – Silicon Valley Bank, https://www.svb.com/trends-insights/reports/healthcare-investments-and-exits/

22. Climate resilience technology: An inflection point for new investment – McKinsey, https://www.mckinsey.com/capabilities/sustainability/our-insights/climate-resilience-technology-an-inflection-point-for-new-investment

23. AI’s role in the climate transition and how it can drive growth – The World Economic Forum, https://www.weforum.org/stories/2025/01/artificial-intelligence-climate-transition-drive-growth/

24. What is factor investing? – BlackRock, https://www.blackrock.com/us/individual/investment-ideas/what-is-factor-investing