Last year’s events
have altered the fortunes of the four large groups of investors—oil
exporters, Asian sovereign investors, hedge funds, and private-equity Frms—described
as “the new power brokers” in a 2007 report from the McKinsey Global Institute.
MGI study analyzed their rapid rise in wealth and clout at a time of soaring crude prices,
expanding trade, and cheap credit. Although the boom years ended in late 2008 as the
Fnancial crisis escalated and the global economy slumped, new MGI research shows that
the power brokers fared relatively well.
But their future paths have diverged: petrodollar
and Asian sovereign investors are more in±uential than ever, while the rapid growth of
hedge funds and private-equity Frms has halted abruptly.
To understand the future evolution of the power brokers, we modeled changes in their
Fnancial assets over the next Fve years under different macroeconomic scenarios, each
with a speciFc trajectory for global GDP, oil prices, trade, recovery in Fnancial markets,
and other key variables. We Fnd that the assets of oil exporters and Asian governments
will grow rapidly in nearly any scenario. The source of their wealth—trade surpluses—will
continue in every case we considered, though the magnitude of those surpluses would vary.
Indeed, we now project that in the base-case scenario the Fnancial assets of oil exporters
and Asian governments will reach levels higher than those we projected in our original
2007 report. In contrast, our future projections for assets under management by hedge
funds and private-equity buyout funds are lower. We still expect the best of each to survive
and even thrive, but it will take time for the portfolios of these institutional investors to
recover sufFciently for them to raise substantial new funds.
Here we will outline our projections for the four groups of investors under three of the
four scenarios we considered. The Frst scenario, the “quick Fx,” envisions a relatively fast
economic recovery in which global GDP starts growing again in late 2009, oil prices climb
steadily to nearly $100 a barrel by 2013, Asian trade surpluses grow (though more slowly
than in the past), and credit markets return to health. In our base-case scenario, “battered