Henry Maxey, chief investment officer at Ruffer, has warned the asset management industry is now the epicentre of risk in the financial system, equivalent to the risk posed by the bank leverage during the 2008 Global Financial Crisis (GFC).
In a note to clients entitled Behind the Illusion of Stability, Maxey said the decade of quantitative easing since the GFC had "distorted behaviour" and facilitated the transfer of risk from the banking sector to asset management. In particular, the CIO said risk is no longer a consequence of leverage being applied to assets, as was the case in the GFC, but instead leverage is, "in effect", embedded in assets. However, he warned that many in the industry have a false sense of security with regard to leverage risk. "Shaped by 2008, investors and system watchers are always now on the...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
