Demand for geopolitical analysis is rising, as asset managers and corporate investors seek guidance on the best way to price in risk from wars, territorial sabre-rattling and global politics.
The need for such advice was highlighted this week when the US threatened various countries with tariffs unless a deal was reached over the US taking control of Greenland, causing a rollercoaster reaction in markets.
Other geopolitical events that have roiled markets include Russia’s 2022 invasion of Ukraine, US President Donald Trump’s 2025 call for broad tariffs and subsequent negotiations with individual countries, and this month’s US intervention in Venezuela.
For investors, geopolitical risk used to be overshadowed by factors including economic data points and central bank decisions.
But since the Ukraine war, the demand for insight has been climbing steadily, PGIM Fixed Income lead geopolitical analyst Mehill Marku said.
“Before 2022, geopolitics wasn’t necessarily an important function in portfolio investment terms; it was a good thing to have but not a ‘must have’,” Marku said, adding the number of client calls had spiked.
“It’s the interconnectedness of all the crises that feels really challenging to many.”
Investors and consultancy firms say the rising need for geopolitical advice and analysis has prompted them to ramp up their own in-house capabilities, seek more independent analysis or increase the advice to give clients.
Such analysis can include written reports, more tailored advice or developing scenario analyses.
“We have to develop a new muscle, almost,” Rishi Kapoor, vice-chair and chief investment officer (CIO) of Investcorp, the Middle East’s biggest alternative investment firm, told the Reuters Global Markets Forum on the sidelines of the World Economic Forum in Davos.
“Earlier on, the geopolitical backdrop was something we sort of took for granted, and just assumed it was a stable backdrop.”
Pandu Patria Sjahrir, CIO of Indonesia’s sovereign wealth fund Danantara, said his fund now did a lot of work on political leaders’ risk.
“This year, maybe even more so than any other year, we’re focusing a lot more on geopolitical risks,” he said.
“We think about the worst case now in terms of underwriting. In fact, my base case is the worst case.”
The second Trump administration’s policies have helped catapult geopolitics to the top spot on the list of client priorities, from being “somewhere in the top 20” about a decade ago, BCG Centre for Geopolitics head Marc Gilbert said.
Everything is “faster, harder, more volatile”, he said of US trade and foreign policy pronouncements.
In the past 18 months, he has had 235 meetings with C-suite officers and corporate board members on these topics, which he said marked a dramatic increase.
Asked for comment on increasing demand for geopolitical analysis, White House spokesperson Kush Desai said the president’s “shakeup of this broken status quo is putting America first” and that “trillions in investments pouring into the US is proof” that investors believe it is the most dynamic global economy.
Banks have been dedicating resources to the theme. JPMorgan launched a dedicated Centre for Geopolitics last year, while Lazard Asset Management and Goldman Sachs launched geopolitical advisory divisions in 2022 and 2023, respectively.
JPMorgan did not return requests for comment on the centre. Goldman and Lazard did not respond to requests for comment.
Heightened awareness of global risk is increasing the need for specialist geopolitical analysis firms, said Matt Gertken, chief geopolitical analyst at investment consulting firm BCA, who said his company was growing, without giving specifics.
Consulting firm Signum Global Advisors has also seen increased demand, boosting its roster of partners by 25% last year as its client list grew, according to Charles Myers, the firm’s chair and founder.
There was particular interest from investors trying to understand what may result from the shifting power dynamics in Venezuela, Myers said, adding that he had 20 spots for an investor trip to the country on March 23 but 60 clients eager to participate and was considering making the trip a full-fledged investor conference at a Caracas hotel.
Jens Larsen, London-based head of Eurasia Group’s geo-economics team, said competition to provide geopolitical insights was growing.
“I’m still not sure that the supply of advice is keeping up with demand as the nature of the challenges becomes multi-faceted,” Larsen said.
Reuters