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Massimiliano Castelli Bailey McCann, Opalesque New York:
As the global financial landscape becomes more heavily regulated and previous sources of capital either stay away from the market or are prohibited by regulators, sovereign wealth funds are likely to gain in prominence, according to Massimiliano Castelli, Head of Global Strategy for Sovereign Wealth Funds(SWFs) at UBS Global Asset Management. In a recent interview on Opalesque Radio, Castelli, explained that the global economy is entering into a,"war for capital," which will make traditional sources of capital more scarce, but may also provide increased opportunity for SWFs which have more flexibility when it comes to investing.
Currently, SWFs manage approximately $5tn in assets, a larger sum than the amount of assets managed by hedge funds or private equity but still less than that managed by the largest institutional investors or insurance companies. This number is rapidly increasing, however, and Castelli forecasts that it will reach between $8-10tn by 2016.
SWFs have a unique role relative to other investors managing trillions of dollars in assets. Unlike pension funds or insurance companies, SWFs typically have no outstanding liabilities and work with little to no leverage. They are also able to invest on a longer time horizon, as they are often searching for long-term value to add to the fund rather than more immediate gains. As such, &q...................... To view our full article Click here
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