Geopolitical Imperatives: Navigating Risk in the Age of Economic Interconnectedness

The demand for geopolitical analysis is surging as investors seek guidance on how to manage risks from global political events. Asset managers are increasingly incorporating geopolitical insights into their strategies, as conflicts like Russia's invasion of Ukraine make such analysis essential for navigating volatile markets.

The demand for geopolitical analysis is on the rise as asset managers and corporate investors look for guidance on pricing risk from global political events. The necessity of such insights was highlighted when geopolitical tensions, such as the U.S. tariff threats over Greenland, caused market upheavals.

Once sidelined by economic indicators and central bank policies, geopolitical risk has climbed in significance, especially following the Ukraine war. Mehill Marku of PGIM Fixed Income notes a significant increase in client inquiries, underlining the challenges posed by interconnected global crises.

As firms enhance their geopolitical advisory capabilities, organizations like Investcorp and Indonesia's sovereign wealth fund Danantara emphasize the need to factor in political risk. With new policies pushing geopolitics to the forefront, consulting firms are expanding services to meet the growing demand for specialized insights.

(With inputs from agencies.)