Columbia Threadneedle host their first mallowstreet University Dinner as part of the 2015 series of educational events.
"There has been a good deal written about the low growth environment and associated low interest rates. Interest rates are extraordinarily low in both real and nominal terms, and the move lower has been accompanied by booming asset prices." So writes Toby Nangle, Global Co-Head of Multi Asset & Head of Asset Allocation EMEA for Columbia Threadneedle.
Over the course of this evening Toby will challenge the notion that global economy has been in a period of slow or no growth ('Secular Stagnation') and instead argue that global economic growth has in fact been strong. Moreover, the extremely low interest rates seen in the developed world have been driven by economic developments (in particular by the globalisation of labour markets) rather than by central bank policy. The global avalanche of labour has meant that companies have had very little incentive to replace labour with capital and as a result the cost of capital for companies has fallen. This, in turn, has meant lower discount rates which, in increasing the present value of future cash flows, has had a significant impact on the performance of asset markets.
Toby finds that the negative asset market implications of slow economic growth in the West have been much less important than the positive asset market implications of weak labour pricing power. What happens in labour markets over the next few years is therefore likely to have important ramifications for asset allocators.
This evening is FREE to attend for pension fund Decision Makers and their Advisors.
