Stephan notes that while certain sub-segments have seen exaggerated pricing, he believes that the AI sector as a whole is not in a bubble. In seeking to capture the AI opportunity, LGT Capital Partners employs a barbell approach: on one side, it invests in current AI enablers such as infrastructure providers, semiconductor companies and private data center projects; on the other, it has exposure to early-stage AI companies through venture capital, where innovative newcomers have relied on risk capital to scale.

Regarding fixed income, Stephan highlights the firm’s cautious stance on public corporate bonds – both investment-grade and high yield – where LGT Capital Partners has seen credit spreads remain at extremely low levels and risks are not adequately compensated. In contrast, LGT Capital Partners is maintaining a higher allocation to private credit, where it believes attractive opportunities continue to persist, as well as to emerging market debt – with a focus on frontier markets.

Turning to equities, Stephan sees opportunities in both European and Japanese markets due to their strong industrial bases and, compared to the US, lower valuations. LGT Capital Partners invests a substantial part of its global equity allocation in private equity, where it favors the small-/mid-buyout segment and secondaries.

Stephan emphasizes that while LGT Capital Partners invests globally, it hedges a large proportion of foreign currency risk for Swiss investors according to the guiding principle “invest in global opportunities but save in Swiss francs”.

Read the full interview in German here in the below PDF or here.