Six of the largest investment firm globally had over $50B in capital outflows

Six of the largest investment firms globally have recorded $52.55 billion year-to-date capital outflows as of March 16, 2023. Four of the six firms are located in the United States, accounting for 80% of the total outflows.

Large investment firms report huge capital outflows

The data shows that Berkshire Hathaway, which is based in Nebraska, had the largest outflow of $29.12 billion out of the six companies. The figure is around 4.27% of the investment firm’s total market capitalization of $652.66 billion.

The firm with the second-highest number of outflows is asset management firm BlackRock. The company had $11.52 billion in capital outflows year-to-date. The figure is around 10.82% of the firm’s total market cap.

International Holding Company had the third-highest outflows of $8.97 billion. However, unlike the first two, this company is situated in Abu Dhabi, among the largest conglomerates in Africa and the Middle East. International Holding Company has a market cap of around $236 billion.

Prosus, an investment firm based in Amsterdam, had the fourth-highest outflows of $1.64 billion year-to-date. Prosus has a market capitalization of around $139 billion. Houston-based telecommunications firm Crown Castle ranked fifth with outflows of $1.23 billion, with a market cap of $ 57.51 billion.

Morgan Stanley, one of the largest financial firms in the United States, had the sixth-largest outflows of $0.07 billion. The bank had the least amount of outflows, with the volumes indicating that investors are more confident with putting their money in large firms than small firms.

The capital outflows were largely caused by economic uncertainty. The situation was also heightened by the recent bank failures in the US that saw three of the largest lenders in the US collapse within four days. The banking crisis in the US over the past week was the worst since the 2008 financial crisis.

Silicon Valley Bank, a technology-focused financial institution, collapsed on Friday last week, which triggered a drop across bank stocks. Two days before Silicon Valley was shut down, Silvergate Bank had voluntarily wound up operations. Signature Bank was also closed on Sunday by New York regulators.

Some investment firms reported inflows

Despite the high volume of capital inflows by some of the largest investment firms globally, some firms recorded inflows. Blackstone Group, based in New York, saw $9 billion in inflows, which raised its market capitalization to $62.57 billion.

Prologis, a real estate investment trust based in California, also reported inflows of $6.76 billion year-to-date. Equinix, a digital infrastructure provider, also reported inflows totaling $3.86 billion.

AB, an investment company based in Sweden, saw inflows of $1.46 billion, with the firm having a market capitalization of $58.13 billion in the first months of 2023 up to March 16. The report by FinBold noted that in the coming months, the increased level of uncertainty in the sector could result in investors using investment firms to remain indecisive until the market conditions improve.