Global Investable Assets Assumptions
To estimate global Investable Assets, we made the following assumptions:
-
Defined the universe of Investable Assets (See Terminology) as all
financial capital available for investment in the world economy, less
operating capital, i.e., less the resources the world economy needs to
function on an ongoing basis.
-
Defined Money Holders as the original owners of the Investable Assets,
who have the most to gain or lose from the appreciation or
depreciation of the investment.
-
Ignore in this definition
government-owned
commercial assets, which amount to approximately $75 trillion in
value, and are a largely opaque asset class not fully driven by market
forces.
-
Included real estate and specifically the purchase of primary homes,
which can technically be both considered working capital or
investment. Owning a house is not only a operating need, but also a
form of investment and a store of wealth for the majority of Money
Holders, especially those with less than $1 million in net worth.
-
Categorized insurance and pensions as Money Holders, although the
policies belong to individuals and they are in fact a hybrid group
that can be considered also part of Intermediaries.
-
Excluded leverage as part of asset manager AUM, although leverage acts
like an accelerator that increased return at higher volatility. For a
comprehensive study of the impact of leverage, which currently stands
at the formidable number of $200 trillion, we recommend reading
Global
Debt and (Not Much) Deleveraging, from McKinsey & Co.
Disclaimers and
Disclosures
\label{disclaimers-and-disclosures}
The opinions expressed herein are only those of the authors
individually, and do not represent the views of any of their employers
or of any other institution with which they are affiliated.
Katina Stefanova is an investor in
AcordIQ
and Long
Game; is a former
Bridgewater
Senior Executive; and continues to have financial interests in
Bridgewater.
David Teten has a financial interest in
Addepar,
Earnest
Research, and
Indiegogo.
Brent Beardsley has been a consultant in the past and possibly in the
future to some of the leading global financial services institutions
mentioned above.
Contributors
\label{contributors}
This study would not have been possible without the collaboration and
support from The
Boston
Consulting Group. We also want to thank the research, technology and
editorial team who supported us during this study: Greg Durst, Jen
McPhillips, Jenny Wong, Charles McLaughlin, Michael Rose, and James
Ebert.
We give special thanks to the dozens of industry leaders that
contributed to this study with their insight. All errors herein are our
responsibility. Among those we interviewed:
Dr Rania Azmi, International Investment Expert & Speaker
Tom Bartman, Senior Researcher, Forum for Growth and Innovation, HBS
Omar Bassal, Head of Asset Management, Mohammed Alsubeaei & Sons
Investments Company
John Casey, Chairman of CaseyQuirk
Mary Cahill, CIO of Emory
Charles Dooley, CEO of AcordIQ
Greg Durst, COO of Marto Capital, former Endeavour, CEO of Africa
Grant Easterbrook, Co-founder, Dream Forward Financial
Charles “Charley” D. Ellis, Founder, Greenwich Associates
Scott Evens, CIO of New York Pension System
Steven Fradkin, President, Wealth Management, Northern Trust
Jeff Hunter, CEO and Founder of Talentism
Omar Kodmani, CEO of Permal
Charles McLaughlin,
Principal,
National Security Practice,
Censeo
Consulting Group
Gary Markovitz, CEO of Business Innovation Partners
Carol Morely, CEO of the Imprint Group
Joseph W. Reilly Jr., family office consultant
Peter Sanchez, CEO Northern Trust Hedge Fund Services
Harry Singh, CFO at AIG Operations
Dhivya Suryadevara, CIO of GM Pension Fund
Amanda Tepper, Chestnut Advisory Group