The race for the Republican presidential nomination is one of the factors driving volatility in financial markets this year, according to GAM Holding AG Chief Executive Officer Alex Friedman.
“When you have wild card dynamics such as those playing out in the Republican contest that just exacerbates volatility,” said Friedman, whose company manages $119 billion of assets, in a telephone interview before Americans went to the polls on Super Tuesday. “The Republican party is facing a more fundamental challenge over identity than ever in my lifetime.”
On Super Tuesday about half of the delegates needed for a Republican candidate to win the presidential nomination are at stake, plus about a third for Democrats. Republican front-runner Donald Trump, who has advocated ideas such as restricting immigration, and leading Democratic candidate Hillary Clinton are ahead in the polls in most states. Friedman was a White House Fellow in the Bill Clinton administration.
“The story today is not about Greece, or even about China, but about the pretty much unprecedented amount of political volatility in every market in the world right now,” Friedman, 45, said. There are questions about countries’ fiscal situations, Europe’s migration issues, elections in Spain and Italy’s bank bail-in program, he said.
The Chicago Board Option Exchange’s Volatility Index, the measure of U.S. equity swings known as the VIX, has risen about 36 percent in the last 12 months.
GAM is seeking to acquire businesses with 1 billion to 15 billion Swiss francs ($15 billion) of assets under management, that run strategies such as real estate debt, trade finance and multi-asset strategies, where GAM has already decided it wants to grow, the CEO said in the interview.