Sat, Mar 24, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Low yield environment increases sovereign wealth fund pressures

Thursday, August 30, 2012

Terrence Keeley
Bailey McCann, Opalesque New York:

Low nominal rates and the end to so-called "risk free" investing is adding to the growing pressure on sovereign wealth funds (SWFs) to perform. Relative to pre-2008 levels, official institutions which hold some $10tn in foreign exchange reserves lose approximately $250bn a year. This reality is forcing sovereign wealth funds to critically examine their investments and look for ways to recapture some of those losses.

"Managers of public wealth have been impacted by the crisis like every other investor, institutional and individual. They have realized that there are no longer assets that are entirely risk free. They are under huge pressure to find more income; since 2008, because of the decline in nominal rates, they are earning hundreds of billions of dollars less," explains Terrence Keeley, Global Head of BlackRock’s Official Institutions Group,in an interview with Opalesque.

As a result, many of these funds are adding to their allocations in alternative investments in order to more quickly recuperate losses and generate returns. However, given the source of those allocations, unique considerations come into play. Prior to 2008, the bulk of these funds relied on foreign exchange reserves to generate income, now, the home states of these funds find themselves on significantly shakier financial ground that they have previously. In some cases, sovereign funds are now included in the growing ranks of risk......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. Institutional Investors - Overdrawn pension fund scores gains[more]

    From Investments in big banks, pawn shops and rolling papers helped boost public safety workers' underfunded pensions this past calendar years, according to newly released figures. After recording middling returns in recent years, the Police & Fire Pension Fund (P&F) notched

  3. Activist Investors - The seven most undervalued stocks in Larry Robbins' portfolio, Stamford hedge fund still seeking shakeup of Taubman board[more]

    The seven most undervalued stocks in Larry Robbins' portfolio From ...On February 14th, Larry Robbins' firm Glenview Capital Management filed its quarterly Form 13F regulatory filing. The firm's stock portfolio totals $18.5 billion with 58 positions according to the latest

  4. Hot hedge fund loses 21% after bet on volatility goes wrong[more]

    From In December, Shahraab Ahmad shared with his hedge fund clients the principle that helped him trounce peers for two turbulent decades: steer clear of the crowd. He'd turned $50 million into an operation with more than $700 million over three years and delivered market-beating retu

  5. Opalesque Exclusive: Northern Trust builds on blockchain-backed private equity solution[more]

    Bailey McCann, Opalesque New York: Private equity clients at Northern Trust can now carry out audits of private equity lifecycle events directly from the blockchain. Northern Trust, working with PwC and other audit firms in Guernsey, has added this feature to its existing solution set for private