No one makes it to the top of a major financial company without a keen understanding of risk. So we asked leaders of investment banks, asset managers, insurers, and private equity firms for their assessments of the perils that await in 2020. As they see it, there’s plenty to worry about—but there are also ways to be ready.
David Solomon
Chairman and Chief Executive Officer, Goldman Sachs Group Inc.
“I don’t think the biggest risks are related to the economy. There is a lot of uncertainty around the political landscape, which can cause businesses to hesitate on investment decisions. I wouldn’t say we’re going to talk ourselves into a recession, but uncertainty around the political landscape isn’t helping the economy or markets.
“As we look out over the next several years, monetary policy will continue to be a big focus, and I believe we’ll look back and have lessons learned around the implications of negative rates.
“We respond by staying focused on our clients and how we can help them navigate the challenges they face. And as a firm, we have a long-term strategy in place that we’re implementing, which is focused on harnessing growth opportunities in our existing businesses, building out new businesses such as consumer, and raising efficiency. Having said that, we have a 150-year history of adapting to dynamic operating environments.”
Kewsong Lee
Co-CEO, Carlyle Group LP
“I am keeping an eye on the potential for a longer-term deterioration in the bilateral relationship between the U.S. and China. If the structural differences separating our two economic and political systems cannot be bridged over time, the ensuing escalation could lead to restrictions on investment and financial flows between our countries. Artificial restrictions on things like access to capital markets, cross-border investment, and asset ownership could slow economic growth and cause significant liquidity issues to emerge, with unpredictable and potentially deleterious market outcomes.
“We remain focused on what we know we can control. This means investing for the long term, remaining disciplined and balanced, working with great partners, and deriving all we can from our global platform to help drive value creation regardless of periodic market disturbances or what’s going on politically.”
Stephen Schwarzman
Chairman and CEO, Blackstone Group Inc.
“Economies around the world are slowing after a period of growth but are still showing resilience—particularly in the U.S. The global trend toward lower and even negative interest rates threatens to further damage growth and leave countries in a challenging position during the next downturn. But the biggest near-term risk remains geopolitical. Any number of seen or unforeseen issues could shake investor confidence and have an immediate negative impact. As I outline in my new book, What It Takes, Blackstone has built a culture that incorporates these downside risks into our decision-making, and it is important that governments, institutional investors, and companies alike do the same.”