Fund Manager Says Global Markets Seeking New Equilibrium

Sherry Rexroad, chief investment officer at BlackRock Global Real Estate Securities, joined REIT.com for a video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.

Rexroad commented on the level of investor appetite for risk, given the deceleration of growth in China.

“The global markets are really trying to come to a new equilibrium, one that’s not as dependent on the Federal Reserve or supercharged growth out of China,” Rexroad said.

While Rexroad said she believes the Chinese “supercycle” has come to an end, she noted that she doesn’t think “it’s going to be a hard landing.”

Rexroad said she is seeing a flight to safety, which is increasing investment out of China. While the slowing Chinese economy has a negative impact on the rest of the world, Chinese cross-border investment is up about 70 percent year-over-year, according to Rexroad. That is helping to support asset prices across the globe, she observed.

Rexroad said she expects capital flows to stay healthy. Capital flows are currently at record highs, she noted. While Rexroad said she is uncertain that such heights can be maintained, capital flows will certainly remain robust.

Meanwhile, Rexroad noted that the United States and the United Kingdom offer investors the most stability, and both are about halfway through the current business cycle.

Certain Asian markets, notably Singapore and Hong Kong, are further along in the business cycle, while Europe is still at the very early stages of the cycle, according to Rexroad.