Post-Pandemic Shift

Evidence from Institutional Investor and Sovereign Wealth Fund Activity

Institutional investors have adjusted their positions to face new risks

May 2022

Institutional investor behavior and sovereign wealth fund activity proved remarkably resilient in the brief recession during the COVID-19 pandemic.

In our latest report, we uncover insights into how they implemented their capital flow and portfolio reallocation decisions over the past year as market conditions evolved. Institutional investors had already started 2020 holding portfolio cash at their highest levels since the 2008-09 financial crisis. While sovereign wealth funds ended 2019 in risk-off mode by deploying minimum capital into direct investments since 2015. With enough cash to weather the storm, institutional investors and sovereign wealth funds reduced fixed-income position and added exposure to risk assets.

Our report insights are backed by our proprietary indicators of institutional investor flows and holdings derived from aggregated activity of institutional investors representing more than US$43 trillion in assets (as of December 31, 2021). This data is contextualized by input from members of the International Forum of Sovereign Wealth Funds (IFSWF).