Summary of Direct Investing by Institutional Investors

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Direct Investing by Institutional Investors summary
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Some big institutional investors are buying illiquid assets on their own instead of through funds. While direct investing is nothing new, it has grown since the 2008 financial crisis, as vast stores of liquidity seek greater returns and more control. Direct investing has ramifications for investors as well as policy makers, as this World Economic Forum analysis explains. Though replete with helpful graphics, the report could use more details and examples. Nonetheless, getAbstract considers it a useful primer on trends in direct investment.

About the Authors

The World Economic Forum is an independent global organization that engages leaders of business, politics, academia and society to improve the state of the world. Oliver Wyman is a global consulting firm.

 

Summary

Stocks and bonds aren’t always enough to meet the investment needs of pension funds, insurance companies and other institutional investors. Big-money investors increasingly are putting their cash directly into illiquid assets, such as real estate and infrastructure projects, rather than just in third-party funds that invest in those asset classes. Direct investors – with an estimated $700 billion in illiquid direct investments in 2013 – include defined-benefit pension funds, insurance companies, sovereign wealth funds (SWFs), family offices, and endowments and foundations. These organizations...


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