Economic growth and sustainability are often at odds. But Lombard Odier Investment Managers see an opportunity in the slowing economic expansion that is coming as the global population ages.
In a report that dubs the “silver economy” a “golden economy,” the Swiss firm argued that elders are likely to spend their money on consumer-oriented products and services rather than big-ticker items that traditionally drive economic activity.
“An ageing society as a megatrend is starting to be realized with the encroaching retirement of the baby boomer generation,” said Stephan Sigrist, founder of WIRE, think tank, in a press release.
Around 10,000 baby boomers are retiring every day in the US alone, he added. Companies that address their needs will grow.
Robotics, virtual reality, mobility and similar services that can address aging populations will become more important and potentially inaugurate a social revolution.
But Sigrist added that the returns won’t be explosive. The aging population will slowly but surely need new services. “This is going to be evolution, not a radical disruption,” he said.
Recreation is likely to expand as well, said Meret Gaugler, who manage Lombard Odier’s Golden Age Fund.
“There are growing links between retirement homes and cruises,” said Gaugler. “Retirees are more inclined to put off the move to a retirement home for perhaps a year since a catered cruise incurs a similar cost. Demand for retirement home places is also outstripping supply, leading to a shortage of available places.”