Geopolitical risks remain top risk; more investors looking to increase cash exposure: Marsh survey

LARGE asset owners are turning to cash, infrastructure and emerging markets amid global volatility, with geopolitics remaining a top risk among these investors, the 2026 Global Asset Owner Barometer survey by professional services firm Marsh has found.

Geopolitics aside, these investors are also making changes to their portfolios in response to persistent inflation and an evolving set of opportunities.

Amit Popat, Marsh’s global head of financial institutions, said more than three-quarters of investors who responded to the poll undertaken by Marsh named geo-economic risk as the top risk.

Their response has been to increase their exposure to cash, “which provides a defensive component in an unknown environment”, he told The Business Times in an interview.

He added that cash also provides options for these investors to take advantage of opportunities that crop up.

Marsh’s survey found that the most significant year-on-year shift in asset class plans was in cash; 38 per cent of respondents plan to step up allocations in the next year, up from 9 per cent in 2025.

The survey gathered the views of 430 global asset owners with more than US$5 trillion in assets under management; they were asked in an online poll between June and July about how decisions on their portfolios were being made amid global volatility.

The respondents included institutional and wealth management groups, of which 28 per cent were based in the Asia-Pacific.

Private markets and selectivity

Increasing exposure to cash aside, more than half of the asset owners surveyed said they intended to increase allocations to investments in infrastructure over the next 12 months; 41 per cent said they were planning to raise their allocations to inflation-linked assets.

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A chief investment officer of a health foundation was quoted as having said that the US had materially underinvested in infrastructure projects, specifically those in energy. This is now regarded as an investment opportunity providing long-term income, exposure to economic and digital development, and a route into energy and transition investment.

Referring to inflation, another key consideration for investors, Cameron Systermans, Marsh’s head of multi assets, said in the same interview: “People are conscious (that) when treasury yields might go up, other asset classes can come under pressure.”

However, he added that the Fed’s rate hike this week increased investor confidence in the Treasury market and in the Fed upholding its mandate to act independently to bring inflation back down to the 2 per cent target.

Another key asset of focus among investors would be in private markets, with 96 per cent of them reporting increased allocations to private markets, up from 80 per cent in 2025.

However, Marsh said they were becoming more selective due to valuations.

Interest in private debt and private equity has cooled from last year’s levels, with just over a third (34 per cent) of asset owners planning to increase holdings in private debt this year, up from 48 per cent in 2025.

Systermans, referring to the uptick in investors’ selectivity, said: “The exits from private equity have been slow, and there is a backlog happening there, so if investors are getting their money back more slowly from prior vintages, then there is less incentive or demand to commit to new vintages.”

Emerging markets equities are another key focus

The survey also found that emerging market equities are gaining momentum, with 47 per cent of respondents looking to increase their allocations to this class.

Popat said that investors are expected to cut allocations to US and UK equities in favour of emerging markets.

Systermans said: “Investors are very conscious of the concentration risk that they are facing in their portfolios from having high exposures to US assets and (now want to) broaden their portfolios away from that.

“Asia is the core driver of that emerging-market allocation. In recent months, (there has been) greater concentration in terms of the likes of Korea and Taiwan, as they perform very strongly.”

He said equities in this space are an area Marsh is overweight on, as AI adoption and demand for training models and data centres has been matched by strong earnings growth.

The capital expenditure involved supports US growth, but much of the hardware – particularly chips – comes from Asia, notably Taiwan and Korea.

“A lot of the growth now... is coming from those AI-related names,” he said, adding that broader adoption should widen earnings growth beyond direct AI names into general goods and services companies.

Geopolitical risks

Investors are advised to focus on understanding the factors that will shape the outlook on growth, economies and corporate earnings, although it is hard to predict what will happen next.

Systermans said: “Geopolitics has really picked up in the last couple of years. This year, it has been really about Middle East tensions; last year was about trade policies, although that hasn’t really (slowed) down.

“We do not really know what is going to happen, but make sure that you can withstand those potential shocks that may happen.”