After coronavirus lockdown, businesses must navigate four major structural changes: PGIM
May 12 2020 - 7:45AM
Business Wire
What will the world look like after the coronavirus? When global
lockdowns end, as families and communities recover, new
opportunities and challenges will emerge for companies—and
investors—around the world as they navigate the economic, social
and political shifts brought on by the pandemic, according to
research from PGIM Inc., the $1.3 trillion global investment
management business of Prudential Financial, Inc. (NYSE: PRU).
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Taimur Hyat, Chief Operating Officer,
PGIM (Photo: Business Wire)
In “After the Great Lockdown,” more than a dozen PGIM investment
professionals across fixed income, equity, real estate,
alternatives, and asset allocation explore how the business models,
strategies and actions of companies will need to adapt to thrive in
a post-COVID-19 world.
“The structural changes unleashed by the Great Lockdown could
transform the business landscape, creating new winners and losers
around the world,” said Taimur Hyat, chief operating officer of
PGIM. “Investors who anticipate these long-term transformations
will be strongly positioned when the dust finally settles.”
PGIM believes four structural changes will reshape businesses
for the long term:
A barbelling of global supply chains: Resilient,
multi-regional supply chains in some sectors paired with a
reshoring back to home markets in other sectors.
“Just in time” to “just in case”: A transition back from
lean inventories to fat inventories, especially in capital goods,
as companies balance higher costs with greater certainty around
supply.
The continued rise of “weightless” firms: A dramatic
acceleration of the trend towards firms built on capital-light,
technology-heavy models and centered on investments in software,
research and development, data and intellectual property.
A shift in real estate usage and footprints: A rethinking
of the “live, work, play” urban real estate model and the coworking
spaces that had powered the gig economy, with added momentum for
logistics, cold storage and warehousing required to support the
next wave of e-commerce and online retail.
While there are clear opportunities for companies that embrace
these transformations, challenges abound—at least in the near term.
Economically, the pandemic-induced global recession could reach a
magnitude not seen since World War II, impacting employment,
inflation, savings and investments for many quarters ahead.
Socially, with minorities and lower-income households
disproportionately affected, the coronavirus crisis will fuel the
growing tensions from widening income and wealth inequality. And
politically, the Great Lockdown will escalate the ongoing tussle
between globalization and sovereignty as the need for a
multilateral response is countered by the compulsion to shut
borders down. PGIM’s investment professionals have explored many of
these critical topics this year and throughout PGIM’s Megatrends
research series.
For more on the new business realities and implications for
investors after the coronavirus, read “After the Great Lockdown” at
pgim.com/lockdown.
About PGIM and Prudential Financial, Inc.
PGIM, the global asset management business of Prudential
Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset
managers in the world* with more than $1.3 trillion in assets under
management as of March 31, 2020. With offices in 16 countries,
PGIM’s businesses offer a range of investment solutions for retail
and institutional investors around the world across a broad range
of asset classes, including public fixed income, private fixed
income, fundamental equity, quantitative equity, real estate and
alternatives. For more information about PGIM, visit pgim.com.
Prudential Financial, Inc. of the United States is not
affiliated in any manner with Prudential plc, incorporated in the
United Kingdom or with Prudential Assurance Company, a subsidiary
of M&G plc, incorporated in the United Kingdom. For more
information, please visit news.prudential.com.
*Pensions & Investments’ Top Money Managers list, May 27,
2019; based on Prudential Financial total worldwide institutional
assets under management as of Dec. 31, 2018. Assets under
management (AUM) are based on company estimates and are subject to
change.
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version on businesswire.com: https://www.businesswire.com/news/home/20200512005139/en/
MEDIA: Julia O’Brien 973-367-7098
julia.obrien@pgim.com
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