Over $50 billion outflows from world’s largest investment companies in 2023

Despite being considered some of the most stable players in the market, investment companies have been hit hard by prevailing economic conditions. The situation has led to selected investment giants recording enormous capital outflows as the future remains uncertain.

In particular, data acquired by Finbold indicates that as of March 16, the world’s six largest investment firms recorded a cumulative outflow of $52.55 billion from their market capitalization in 2023. Four affected companies are based in the United States and account for almost 80% of the lost capitalization.

U.S.-based investment giant Berkshire Hathaway accounts for the highest loss of $29.12 billion or 4.27%, with the firm’s current market cap standing at $652.66 billion. BlackRock’s market cap of $94.91 billion represents year-to-date losses of $11.52 billion or 10.82%.

International Holding Company has the third-highest losses at $8.97 billion, followed by Prosus with an outflow of $1.64 billion. Crown Castle ranks fifth with a market cap of $57.51 billion after recording an outflow of $1.23 billion. U.S. banking giant Morgan Stanley has the least losses of $0.07 billion.

Elsewhere, some firms also recorded capital inflow on a YTD basis, led by Blackstone Group, which has a market cap of $62.57 billion after attracting $9 billion. Prologis has an inflow of $6.76 billion, followed by Equinix at $3.86 billion. Investor AB has a market cap of $58.13 billion with a 2023 inflow of $1.46 billion.

Economic uncertainty hits investment companies’ capitalization

The research explained how market conditions had impacted the capitalization of investment firms. According to the research report:

“The plunge in market cap is a direct impact of investors’ rising level of uncertainty due to persistently high global inflation, change in monetary policies, and interest rate hikes by various central banks. The elements have culminated in concerns about a worldwide recession as investors partly dump stocks in search of products to cushion against inflation.”

Looking ahead, the prevailing level of uncertainty could push investors targeting investment firms to stay on the sidelines until market conditions improve.