Record Fund
In the U.K, the Pensions and Lifetime Savings Association, which represents 1,300 members who oversee 1 trillion pounds ($1.3 trillion) in assets, says it’s getting an increasing number of calls from pension trustees asking how they can use ETFs for asset allocation and cash management.
Data on how much dry powder is “parked” in ETFs is hard to come by because the products are bought on the public markets. Eric Balchunas, an ETF analyst at Bloomberg Intelligence in New York, estimates that institutions globally, including endowments and sovereign wealth funds, have about 1 percent of their roughly $80 trillion of assets allocated to ETFs, so there’s room to grow. With more coming around to using ETFs, and dry powder building up in other asset classes as well, that number looks set to increase.
Carlyle Group LP’s David Rubenstein has said the fundraising market is now the best he’s ever seen, and Apollo Global Management LLC last month raised the biggest-ever buyout fund, with almost $25 billion committed. London-based Oakley Capital has amassed about 800 million euros ($938 million) for its third mid-market private equity fund, people familiar with the matter said this week, more than 50 percent higher than its last capital raise.
Until that cash is used for deals, private equity investors “are putting the money into equity markets, plain and simple,” said Wayne Bowers, Northern Trust Corp.’s Chief Executive Officer for Europe and Asia. “They’re making the money sweat.”
This article was provided by Bloomberg News.