Amundi’s Dollar Shift and the Future of Asset Allocation
Europe’s largest asset manager, Amundi, is signaling a significant shift in investment strategy, reducing exposure to US dollar assets and pivoting towards European and emerging markets. This move, driven by concerns over US economic policies and the dollar’s weakening trajectory, highlights a growing trend among major investors to diversify portfolios beyond the traditional US stronghold.
The Weakening Dollar and the Search for Alternatives
Amundi CEO Valérie Baudson has advised clients to diversify away from the greenback, anticipating further weakening if US economic policy remains unchanged. This isn’t an isolated stance. Several large investors are hedging against US assets, a trend initially spurred by Donald Trump’s “liberation day” tariff shock last April and further fueled by concerns regarding international relations and the Federal Reserve’s independence.
The initial response to dollar weakness saw investors flocking to gold as a safe haven. Yet, the current shift indicates a broader move towards reallocating capital into European and emerging market assets, both in fixed income and equities. Last year witnessed emerging market stocks achieving their best performance since 2017, largely attributed to the dollar’s decline, with gains continuing into early 2026.
Private Equity Performance Under Scrutiny: USS and CVC
While the broader asset management landscape is shifting, the performance of private equity firms is facing increased scrutiny. Two cases – the Universities Superannuation Scheme (USS) and CVC Capital Partners – illustrate the challenges and complexities within this sector.
USS’s Private Market Headaches
USS, a UK pension fund with £77bn in assets, has experienced setbacks with several private market investments. The recent insolvency of broadband provider G.Network, in which USS invested close to £300mn, resulted in a complete loss of equity. This follows previous disappointments with investments in Thames Water and battery maker Northvolt, raising questions about the fund’s private market strategy.
Despite these losses having a limited impact on the overall scheme, transparency remains a key concern for USS members. The government is currently encouraging retirement funds to increase investment in private markets to stimulate the British economy, making USS’s experience a critical case study.
CVC’s Public Market Disconnect
Despite a record year for cash returned to investors, CVC Capital Partners has struggled to gain traction in public markets. Shares have remained around the initial listing price from April 2024 and have underperformed peers by at least 10 percentage points over the past year. This disconnect stems from the firm’s difficulty in satisfying the expectations of public market investors, despite its strong reputation within the private equity industry.
An industry-wide sell-off in February 2026, triggered by fears surrounding AI’s impact on software investments, further pressured CVC’s share price. While the firm was less exposed to software than some rivals, the incident underscores the volatility and sensitivity of public market perceptions.
Navigating the New Landscape: Key Trends
These developments point to several emerging trends in asset management:
- Geopolitical Diversification: Investors are increasingly prioritizing diversification beyond the US, driven by political and economic uncertainties.
- Private Market Risk Assessment: The performance of USS and the scrutiny of CVC highlight the need for rigorous due diligence and risk management in private market investments.
- Public vs. Private Market Alignment: Firms with both private and public market exposure face the challenge of aligning expectations and demonstrating value to different investor bases.
Pro Tip
When considering investments in emerging markets, focus on countries with strong economic fundamentals and a stable political environment. Diversification within emerging markets is as well crucial to mitigate risk.
Industry Moves
Recent industry news includes Rokos Capital Management halting talks with Lord Peter Mandelson over an advisory role, Canada Pension Plan Investment Board and Ontario Municipal Employees Retirement System planning to sell their stakes in Associated British Ports, Brookfield promoting Connor Teskey, and Permira’s Kurt Björklund relocating his residency to Switzerland.
FAQ
- Why is Amundi reducing its US exposure? Concerns over US economic policies and the potential for further dollar weakening are driving this decision.
- What are the challenges facing USS? USS is facing challenges with several private market investments and a lack of transparency regarding performance.
- Why is CVC’s share price underperforming? CVC is struggling to meet the expectations of public market investors despite strong performance in its private equity business.
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