This hedge fund manager is telling investors to prepare for higher inflation ahead


The George Washington Statue at the Federal Hall National Memorial on Wall Street across the New York Stock Exchange on January 27, 2021.

Timothy A. Clary | AFP | Getty Images

The Covid pandemic helped accelerate several important trends that will have important investing impacts in 2021, according to Thomas Friedberger, who runs the Paris-based hedge fund Tikehau Capital Management.

Among the ramifications he sees from the changing landscape are accelerated inflation and a battle between the U.S. and China as the latter seeks to get its currency more universally recognized for use in global transactions.

The virus fallout, in which global supply chains were crippled due to government restrictions, also is expected to force countries and companies to re-shore activities, resulting in higher input costs.

Investors in this climate will find good returns in traditional inflation hedges as well as companies with strong cash positions, he said.

“2020 showed the extraordinary vulnerability of a global economy,” said Friedberger, who is co-CIO and co-CEO of the fund, which manages 27.2 billion euros, or about $33 billion in U.S. currency. “When something goes wrong that’s not on the agenda, like the Covid crisis, then everything gets fragile and vulnerable. It shows the need to be in a more sustainable growth system.”

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