The Davos summit is on top of every top executive worldwide. The most rich and powerful from each country attend this high profile meet.
There is a little exercise that carried out during this meet – World’s top Investment Managers get together in one small room and are given mock $1 billion and half an hour to create a winning portfolio for each of the following categories.
- pension fund
- sovereign wealth fund
- infrastructure fund
- multi-family office
- hedge fund
- private equity fund, and a
- real estate investment trust
This, although an experiment gives clear insight on where and which Geography these top investors are bullish on ! Here is what the outcome of this exercise was !
Note: These numbers have been directly picked up from here:
Being Pensioner’s money, the group played safe and invested 65% of money in developed markets, and 35% in emerging markets. Majority of chunk from Emerging Markets went to China ! Other countries in South Asia also recd. good chunk of money !
Sovereign Wealth Fund
The biggest beneficiary for this was Norway, and the portfolio tilted on Energy investments in Developed and Emerging countries. Again here, the group was big on China, but very underweight on Japan and South Korea.
Now here is a big surprise, the team decided to put full $1 billion USD in India citing "chronic supply gap and high capital need".
Now you know where you should put money :)
The money was put in quality shares, with 40% of the money going to North America, 20% to Western Europe, and 30% to Brazil, India and China (but nothing to Russia), with the rest spread around.
30% of the money went into US mortgages and high-tech firms, in China for consumer focused businesses and India for infrastructure. Team was "cautious" on Europe and "short" (i.e. betting on a decline) on the UK economy, roubles and the yen.
Geographically, United States got 30%, Europe got 25% and Japan got 5%. Rest 40% was put aside for Emerging Economies (China 15%, India 15%, Russia 5%, Latin America 5%)
Real Estate Investment Trust
The team decided to go with broad geographical spread and low-risk investments,with being heavily overweight in emerging markets (50%), with 20% going to the US, 15% to the EU and another 15% to Australia.
North America was still the most preferred destination for investment, but the big winners in this experiment were India and China.
For more details and reasons behind these investments, go here: