Investors in large US technology companies have no need to fear a tougher regulatory environment under new president Joe Biden, according to Chris Teschmacher, multi-asset fund manager at Legal and General.
Many members of Mr Biden’s Democrat party have expressed an intention to introduce regulatory changes that could impact the group of large US technology businesses known as the FAANGs, that is, Facebook, Apple, Amazon, Google and Netflix.
But Mr Teschmacher is more sanguine. He says: “Many believe Joe Biden’s victory in the US presidential election could spell the end for Big Tech as the Democrats seek to regulate the sector more tightly.
"The impact of the new administration may well be overstated in this regard, though.
"Biden has not shown a particular passion for tech regulation during the campaign or his long prior political career. The presence of individuals with Big-Tech backgrounds in Biden’s transition team also suggests he is not overtly against the sector.
"In the medium term, we think the US has little incentive to over-regulate the sector due to its battle for tech supremacy against China.
"We believe the rising tension between the US and China will be the most important driver of geopolitics over the next 10 years as both sides seek to avoid the Thucydides trap.
"While Biden’s diplomatic style and tone may be more traditional than Trump’s, we don’t believe foreign policy towards America’s growing rival will change significantly in substance.”
He added that even if there is more scrutiny of those businesses on competition grounds, he believes the history of such investigations shows them to be “toothless.”
James Beaumont, head of multi-asset portfolio solutions at Natixis, says the risk that will most concern investors is that some elements of Mr Biden’s own party could drive a general anti-business agenda.
