SINGAPORE: Ray Dalio, founder of the world's largest hedge fund, and Lim Chow Kiat, the boss of Singapore's sovereign wealth fund GIC are increasingly cautious on the year ahead due to political risk and uncertain global growth prospects.
However, both said on Wednesday they remained committed to investing in China, despite challenges such as rising debt problems and geopolitical tension.
Dalio, who founded Bridgewater Associates, said geopolitical issues and the cost of climate change and its implications for financial markets were among factors that could create negative risks for global investors in the next year.
"The surprises are more on the downside than the upside," Dalio said at the Milken Institute Asia Summit 2024 in Singapore.
Dalio said despite the U.S. having a lot of positives, there is a risk around an orderly transition of power.
GIC CEO Lim said the Singaporean sovereign wealth fund has to be more selective in terms of finding investment opportunities rather than making wholesale big market allocations.
"It (the market) has priced in a soft landing, which is wonderful. It also has priced in significant growth coming from the tech sector, so to that extent we will be a bit more cautious," Lim said, referring to the U.S., its single largest country exposure at 39% of its portfolio.
The U.S. will remain a key market for GIC regardless of the outcome of the upcoming election, Lim said, adding that the country has a huge private sector with "a lot of good assets for us to be investing in."
Lim said GIC continues to invest in China, though deal flows have been "extremely slow" and the market has low expectations for the country's growth.
"This may take a while for things to work through, but certainly as the second largest economy in the world with great entrepreneurs, it is a place that we cannot miss out," he said.