In 1993, international investments by U.S. tax-exempt institutions soared 69% to $262 billion - triple the annual growth rate of the past five years, according to InterSec Research Corp., Stamford, Conn.
Foreign holdings grew 34% in the second half of the year, which was even faster than the 25% in the first six months of 1993. InterSec attributed about half of 1993's asset gains to strong foreign market performance. Net new appointments came to $25 billion, while cash contributions totaled $39 billion. After withdrawals, total inflows weighed in at $46 billion.
Equity was the strongly preferred international asset class. Within that category, broad international equity assignments accounted for fully half of total net flows, while emerging markets assignments came to 7%. However, emerging markets mandates had reached $14 billion by year-end, said InterSec.
The firm projects that in 1998, overseas assets held by U.S. institutions will climb to $630 billion, which will account for almost half of all world pension assets invested non-domestically, the firm said. The year-end overseas total of $262 billion is now more than four times the amount of holdings five years ago, and "represents the fourth largest pool of managed assets in the world" after total U.S., U.K. and Japanese assets, said InterSec.