Seven panels at the HKMA Investment Forum in Hong Kong on 4 November 2026 covered macro risk, the asset-management model, hedge-fund alpha, private equity, AI, Asia and private wealth. Taken one at a time, each produced a familiar set of views. Read together, they answer a sharper question for Asia-Pacific asset owners and private wealth investors: if the diversification that carried portfolios through the last decade is weakening, where does protection now come from?
The answer that emerged across the day was consistent. Protection no longer comes from owning the index, from holding more asset classes or from spreading money across more countries. It comes from selectivity at the level of the single company, the single loan and the single jurisdiction, and from managers who can prove that their judgment adds value after fees.
The opening panel set the tone. Richard Oldfield of Schroders warned that geopolitics, higher oil prices, persistent inflation and rising sovereign debt-service costs could arrive at the same time, eroding the diversification portfolios have relied on. Karin van Baardwijk of Robeco described the market’s expansion as conditional rather than structural, with the margin for error narrowing as gains concentrate in a small group of AI-related stocks.
The second panel supplied the evidence that concentration is now embedded in passive products themselves. Katie Koch of TCW said some capitalisation-weighted growth indexes hold roughly 60 per cent of their exposure in six companies, and that the large-cap growth benchmark sits in the bottom quartile for the first time in her 46-year career. When one or two names stumble, the index falls with them.
The hedge-fund panel took the point further. Nicolas Giauque of Farallon said sector moves have been far more dramatic than index moves, and that geographic diversification is less effective when the same AI-related exposures appear across markets. His firm looks for positions where more than 70 per cent of the risk is company-specific. The practical message for asset owners is that a portfolio can look diversified by region and asset class while carrying one underlying bet.
That reframes manager selection. Hendrik du Toit of Ninety One argued that active management is not in a great place today but is probably in a great place tomorrow, helped by lower fees, more diverse return sources and better use of data. If the index carries hidden concentration, the case for paying for genuine stock and credit selection strengthens, provided the manager can show the return is not simply the index in another form.
The second thread was the quality of debt, both sovereign and private. Du Toit and Koch pointed to healthier fiscal metrics in many emerging markets than in developed sovereigns. Koch put average deficits at around 3.5 per cent in emerging markets against more than 6 per cent in developed markets, with debt-to-GDP near 60 per cent against 112 per cent. Du Toit cautioned that the yield gap is not yet wide enough to trigger a large reallocation, because US investors have been rewarded for staying at home.
In private markets the same higher-rate world is forcing a reset. John Redett of Carlyle said returns can no longer rely on multiple expansion and that the focus has returned to operational value creation, with a shake-out to follow. Jonathan Sokoloff of Leonard Green showed what delay costs: a sale at today’s mark that would deliver a 20 per cent IRR falls to 11 per cent if the exit slips three years. His blunter point was that the only real IRRs are those realised on exit.
Difficulties we see in front of us happen simultaneously and that destroys some of the diversification that we’ve seen in people’s portfolios.
Richard Oldfield, Schroders
Credit specialists were more worried about old exposures than new ones. Tony Yoseloff of Davidson Kempner said US look-through default rates in public markets and private credit have run at roughly five to six per cent over the last three years. John Aylward of Sona Asset Management said cumulative five-year default rates in broadly syndicated loans have already exceeded Global Financial Crisis levels. Distributions from private-equity funds have roughly halved, to around 10 to 13 per cent a year.
For asset owners the implication is not to retreat from private markets but to underwrite them differently. Exit discipline, realised distributions and the quality of continuation-vehicle governance now matter more than reported marks. Juan Delgado-Moreira of Hamilton Lane said continuation vehicles account for nearly half of secondary volume, with assets rolling into them having already returned about four times money on average, a channel that rewards buyers willing to examine the governance closely.
The final thread was Asia’s place in global portfolios. Jeffrey Perlman of Warburg Pincus argued that portfolios remain heavily concentrated in the United States relative to Asia’s share of growth, and that even a modest reallocation towards Asia, including China, would be significant. The opening panel had already made the related case that Asia should be treated as differentiated rather than monolithic, with China increasingly viewed as a distinct asset class and separate paths in Japan, Korea and Taiwan.
Deployment, however, requires local depth. Ben Way of Macquarie Asset Management said bankable infrastructure exists across Asia but differs sharply by market, and that recent exits show capital can be realised. Private equity leaders made the same argument about regional teams: global platforms win where they combine shared capability with genuine local execution.
The AI panel added a note of patience. David Siegel of Two Sigma said organisational change, not technology speed, is the main constraint on visible returns, and that validating agentic systems inside companies will take more than a year to resolve. That matters for how asset owners judge AI holdings: an absence of near-term return figures does not by itself signal wasted spend, but it does lengthen the period over which expectations must hold.
The wealth panel closed the day on the same theme from the client side. Laurent Ramsey of Pictet said Asian high-net-worth investable wealth has grown ninefold over three decades to around US$30 trillion, and that conversations have moved from creating wealth to protecting it. Christel Rendu de Lint of Vontobel described booking-centre diversification as the ultimate form of diversification for ultra-high-net-worth families: if the custodian and jurisdiction fail, the underlying investments become secondary.
Across the seven panels, diversification was redefined rather than abandoned. For asset owners, that points to three practical tests. First, look through regional and asset-class labels to the underlying exposures, because the same AI and rate risks now appear in places portfolios treat as separate. Second, judge private-market managers on realised exits, distributions and governance rather than marks. Third, treat Asia, and China within it, as a set of distinct opportunities requiring local capability, rather than a single regional allocation.
For private wealth investors in the region, the jurisdictional dimension adds a fourth test: where the assets are booked, and whether the structure holds if politics shifts. The forum’s shared conclusion was that the next cycle will reward judgment more than exposure.