Christian Frei: Geopolitical Uncertainty

In this episode of RPM, we’re talking about the direct and indirect effects of the war in Ukraine.

• While private markets may have relatively little direct exposure to Russia, Ukraine, Poland and Belarus (2:00), measuring the indirect effects is more difficult.
• In some instances, the higher prices and price inflation that the war may effect could provide a tailwind to some asset classes (10:40).
• Because private market valuations lag behind those of public markets, investors often wonder what the latter portends for the former. In short, private equity valuations fall half as much as their public equity counterparts; in private debt, market value declines have been 5x or greater than subsequent credit losses (12:56).

All that is to say that an allocation to private markets can add stability to a portfolio.

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