MacroScope

Shining a light on the dismal science

New power brokers of the world

Jul 9, 2009 09:19 EDT

It’s been a few years since oil exporters, Asian governments, hedge funds and private equity firms became the new power brokers of the world given their growing wealth in the global economy.

But there is no doubt that the credit crisis has halted the power brokers’ rapid ascent. According to a new report from McKinsey Global Institute, their collective assets posted no growth at the end of 2008 from the previous year, holding steady at $12 trillion.

However, they are expected to sharply boost their wealth in the next four years. The report expects foreign financial assets held by Asian sovereign investors and oil-exporting nations to more than double to $21.7 trillion by 2013 from the current $9.7 trillion.

Already in 2008, oil investors and Asian governments combined were providing the world’s financial markets with roughly $4.5 billion per day in new capital—up from $2.5 billion in 2007.

In oil-producing nations, central banks, sovereign wealth funds, high-net-worth individuals and other petrodollar investors invested more than $1.3 trillion in foreign financial assets in 2008—a 58 percent increase over the previous year.

Comments

Blackrock beware! These are players with a tremendous appetite and very deep pockets.

 

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