For How Much Longer Are Sovereign Funds Expecting Lower Volatility?

Given that U.S. stock market volatility remains subdued and measures are touching new lows, some chief investment officers are growing concerned that a possible equity market correction could occur in the near term.

Sovereign investors have expressed a level of unease over the flood of quantitative easing money seeping into global equity markets. These central banking measures have helped accelerate the demise of notable hedge funds, while giving gifts toward private equity and real estate institutional products. To illustrate, sovereign investors like the Qatar Investment Authority (QIA) recently realigned its asset allocation, permitting more firepower toward mezzanine debt and property plays in the United States. With its minted Manhattan outpost office, QIA has made debt investments such as US$ 161.5 million mezzanine debt allocation to a condo development at 111 West 57th Street. Heading further East, GIC acknowledged in its recent annual report that “abundant liquidity and low yields, which have contributed to the suppression of volatility across equity markets,” has impacted the fund’s investment decisions. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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