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How Patient are Institutional Investors from Emerging Economies?

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  • Peter Cornelius
  • Edo Aalbers

Abstract

The global economy faces huge investment needs in infrastructure and other areas requiring patient capital. The public sector is unlikely to meet such needs as unsustainable debt levels demand deep fiscal adjustment measures. At the same time, there is growing concern that private long-term investors in advanced economies, such as pension funds and life insurers, might be unable to provide the necessary capital as they continue to de-risk their portfolios and become subject to more stringent regulation. Against this background, this paper assesses the potential role of new investors in emerging economies as suppliers of patient capital. The paper concludes that continued social security reforms and the dismantling of investment restrictions should allow pension funds and insurance companies in emerging markets, in concert with sovereign wealth funds, to help narrow the gap that is feared to emerge due to the more constrained supply of capital from traditional investors.

Suggested Citation

  • Peter Cornelius & Edo Aalbers, 2012. "How Patient are Institutional Investors from Emerging Economies?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 13(3), pages 85-108, July.
  • Handle: RePEc:wej:wldecn:529
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    5. Tripp,Charles, 2006. "Islam and the Moral Economy," Cambridge Books, Cambridge University Press, number 9780521682442, March.
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