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Six of the world’s largest investment firms have seen huge year-to-date (YTD) capital outflows from their market capitalization as economic uncertainty plagues the industry. As of March 16, 2023, major investment firms accounted for a capital outflow of $52.55 billion year-to-date, according to new data from financial publication FinBold.
Of the six, four are based in the United States and together account for almost 80% of capital outflows, FinBold said in its report, noting that “the fall in market capitalization is a direct impact of the increasing level of uncertainty of the investors due to persistently high global inflation, a change in monetary policy and interest rate hikes by various central banks.
Of the six companies, Nebraska-based Berkshire Hathaway saw the largest outflow, with $29.12 billion leaving the US investment giant. This represents 4.27% of the company’s current market capitalization of $652.66 billion.
New York-based global investment firm BlackRock lags behind Berkshire Hathaway, with $11.52 billion leaving the firm since the start of the year. This represents 10.82% of the company’s current market capitalization of $94.91 billion.
International Holding Company (IHC), an Abu Dhabi-based investment firm, which has seen $8.97 billion in capital outflows year-to-date, comes third with the biggest loss. The market capitalization of the company, which is one of the large conglomerates in the Middle East and Africa, is approximately $236 billion.
Additionally, Prosus, one of the world’s largest technology investors, has seen an outflow of $1.64 billion year-to-date, ranking fourth. The Amsterdam-based company currently boasts of a market capitalization of around $139 billion.
In fifth place is Crown Castle, a Houston-based telecommunications network operator, which recorded an outflow of $1.23 billion, bringing its market capitalization to $57.51 billion. In contrast, US banking giant Morgan Stanley, ranked 6th, recorded the fewest losses with a capital outflow of $0.07 billion.
Although the economy was a major contributor to the fall, capital outflows from U.S. investment firms come at a time when the country’s banking sector is grappling with some of its largest bank failures since the financial crisis of 2008. Four US lenders collapsed in four days last week.
Technology-focused Silicon Valley Bank slumped last Friday, casting a shadow over bank stock prices which fell significantly although they subsequently rebounded. Signature Bank was closed later on Sunday. However, days earlier, crypto-friendly Silvergate Bank voluntarily liquidated its assets.
Blackstone, Prologis and others generate capital inflows
Despite the huge volume of capital outflows, some investment firms also generated a large volume of inflows. That group was led by Blackstone Group, a New York-based alternative asset manager whose market capitalization soared to $62.57 billion after attracting $9 billion.
Blackstone Group was followed by Prologis, a California-based REIT which generated an inflow of $6.76 billion during the period. Digital infrastructure provider Equinix is next with a contribution of $3.86 billion.
Additionally, Swedish investment firm Investor AB generated an inflow of $1.46 billion with a market capitalization of $58.13 in the first months of 2023 through March 16.
“Looking ahead, the current level of uncertainty could cause investors targeting investment firms to sit on the sidelines until market conditions improve,” FinBold said in a statement.
Six of the world’s largest investment firms have seen huge year-to-date (YTD) capital outflows from their market capitalization as economic uncertainty plagues the industry. As of March 16, 2023, major investment firms accounted for a capital outflow of $52.55 billion year-to-date, according to new data from financial publication FinBold.
Of the six, four are based in the United States and together account for almost 80% of capital outflows, FinBold said in its report, noting that “the fall in market capitalization is a direct impact of the increasing level of uncertainty of the investors due to persistently high global inflation, a change in monetary policy and interest rate hikes by various central banks.
Of the six companies, Nebraska-based Berkshire Hathaway saw the largest outflow, with $29.12 billion leaving the US investment giant. This represents 4.27% of the company’s current market capitalization of $652.66 billion.
New York-based global investment firm BlackRock lags behind Berkshire Hathaway, with $11.52 billion leaving the firm since the start of the year. This represents 10.82% of the company’s current market capitalization of $94.91 billion.
International Holding Company (IHC), an Abu Dhabi-based investment firm, which has seen $8.97 billion in capital outflows year-to-date, comes third with the biggest loss. The market capitalization of the company, which is one of the large conglomerates in the Middle East and Africa, is approximately $236 billion.
Additionally, Prosus, one of the world’s largest technology investors, has seen an outflow of $1.64 billion year-to-date, ranking fourth. The Amsterdam-based company currently boasts of a market capitalization of around $139 billion.
In fifth place is Crown Castle, a Houston-based telecommunications network operator, which recorded an outflow of $1.23 billion, bringing its market capitalization to $57.51 billion. In contrast, US banking giant Morgan Stanley, ranked 6th, recorded the fewest losses with a capital outflow of $0.07 billion.
Although the economy was a major contributor to the fall, capital outflows from U.S. investment firms come at a time when the country’s banking sector is grappling with some of its largest bank failures since the financial crisis of 2008. Four US lenders collapsed in four days last week.
Technology-focused Silicon Valley Bank slumped last Friday, casting a shadow over bank stock prices which fell significantly although they subsequently rebounded. Signature Bank was closed later on Sunday. However, days earlier, crypto-friendly Silvergate Bank voluntarily liquidated its assets.
Blackstone, Prologis and others generate capital inflows
Despite the huge volume of capital outflows, some investment firms also generated a large volume of inflows. That group was led by Blackstone Group, a New York-based alternative asset manager whose market capitalization soared to $62.57 billion after attracting $9 billion.
Blackstone Group was followed by Prologis, a California-based REIT which generated an inflow of $6.76 billion during the period. Digital infrastructure provider Equinix is next with a contribution of $3.86 billion.
Additionally, Swedish investment firm Investor AB generated an inflow of $1.46 billion with a market capitalization of $58.13 in the first months of 2023 through March 16.
“Looking ahead, the current level of uncertainty could cause investors targeting investment firms to sit on the sidelines until market conditions improve,” FinBold said in a statement.
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