Global Macro: An Investment Consultant’s Perspective

Simon Fox

This article was first published as a chapter in Global Macro: Theory and Practice, by Risk Books.

As a global investment consultant, Mercer has experience of working with clients from a variety of backgrounds. While some of our clients would recognise the term global macro, many others will have originally invested in what was called global tactical asset allocation (GTAA). In this chapter, we will review the history of investing in global macro strategies by many of our clients, before considering the role that these strategies have played over time and the rationale behind them. We will conclude with a discussion of how we see them being used by investors over the coming years.

Historical Background

For some of our clients, global macro exposure has always been part of their hedge fund allocation, often in the form of a sleeve in a broader fund of hedge funds portfolio. In this way, the exposure to macro has been part of a general “alternatives” exposure that has sought to diversify traditional equity and, in some cases, fixed income allocations.

For many in the US, however, the macro allocation evolved from a more traditional tactical asset allocation (TAA) mandate