Summary

The impact of pooled investment money, including hedge funds, is attributing to an increase in capital within the financial markets.

Analysis

 
 
 
With financial markets showing resurgence and investor pessimism declining, pooled investment vehicles are well positioned to facilitate economic recovery as well as overall growth in world financial markets.
 
The asset levels of sovereign wealth funds have had substantial increases. While there are some countries that have had little or no surplus, many countries are experiencing tremendous growth due to their export activities.
 
 Although sovereign wealth funds have experienced some challenges as a result of the credit crisis, it is estimated that total assets under management held in sovereign wealth fund accounts could reach levels near U.S. GDP within the next several years.
 
Investments in some smaller funds are still likely to be relatively conservative while financial markets go through a stabilization period. These funds are likely to invest in treasury and fixed income securities.
 
Large funds and those from emerging markets are likely to employ more of an aggressive strategy, increasing exposure to equities and alternative investments.
 
Expect to see aggressive strategies also with some newly formed funds, particularly in countries such as Africa and parts of the Middle East. These new funds hope to export natural resources, and oil over the next several years.
 
 

This author consults with leading institutions through GLG

Engage this author or other Financial & Business Services experts
 
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.