Asia Pacific continues to present compelling opportunities amid an evolving market landscape, according to Federated Hermes’s 2025 outlook.
In particular, “the structural growth in Asian wealth remains one of our conviction themes and we’re focusing on how best to bring investment ideas, strategies and solutions to the wealth market,” said Jim Roland, head of business development, Asia Pacific.
As the prospect of a higher-for-longer interest rate environment seems more likely, the asset manager is seeing “sustained appetite for money market and liquidity solutions as investors seek to optimise their cash positions while maintaining flexibility”.
Meanwhile, a more sophisticated family office ecosystem in Asia is notable, with more multi-generational wealth management strategies emerging, driving demand for more complex and tailored investment solutions.
“This trend is likely to persist and is an area we’ll be focusing on in 2025,” said Roland (pictured).
In public equities, Federated Hermes expects that the year will “reward selective and differentiated stock selection in Asia, particularly in China where valuations are becoming increasingly attractive”.
Unlike some other asset managers, the firm also notes an accelerated adoption of ESG integration across the region, driven by both regulatory requirements and genuine investor demand.
In private markets in the region are maturing and offering more complex opportunities across private equity and private debt, and real assets. Portfolio diversification, attractive risk-adjusted returns, and the need to capture emerging trends, especially in the lower and mid-markets which drive a lot of economic activity in Asia means that the momentum will continue.
Despite geopolitical and global economic challenges, Federated Hermes maintains a “constructive view on Asia Pacific markets”.
The region’s fundamental growth drivers, coupled with evolving market sophistication, continue to create compelling opportunities for discerning investors,’ said Roland.
