Investing in a global scenario has become a paradigm in today’s economy. However many wonder what is the future of capital investment and private equity in the world as the current economic tides drift downstream. One idea that prevailed at the Blouin Creative Leadership Summit in Manhattan is that international assets will only become stronger as investors increasingly focus on overseas funds. Stephen Toy, Managing Director at WL Ross & Co. and John Allen, Chairman and CEO of Greater China Corporation, confirmed this trend.
International businesses have been making profits all over the world even as the global economic meltdown unfolded (though less than they would dream of). Now that the height of the financial disaster in the United States is over — even as a domestic budget crisis looms — and Europe’s momentum is picking up, investors are expected to pour more money into funds located around the world. “In Europe we are experiencing a turn-around towards distressed type investments,” said Stephen Toy. He said that Ireland, from his point of view, is the strongest example of slow and steady recuperation and that the reforms are a long-term strategy. He considered the reforms put in motion to be humble. “They are not popular but there are problems that have to be dealt with,” he stated. Today, capital is again flowing back into the euro area.
Sociopolitical situations factor into investment decisions, of course, but they are not finally dispositive. Something that could grant emerging markets, where social stability isn’t always a given, some leverage. Consider China: As China shies away from its own problems it undertakes an enormous transformation based on shifting towards a consumption-driven economy and, at the same time, change from debt to equity, something that will have an impact on U.S. Treasury Notes. The big questions that appear are how do you develop such a renovation and what will happen once it takes place. John Allen warns: “don’t sell China short.”
