With $1 Trillion Chasing Deals, Investors Park Cash in ETFs - Bloomberg

...BlackRock Inc. and State Street Corp., two of the world’s biggest providers of ETFs, say an increasing number of institutional investors are using their products to park money earmarked for private funds. These investors -- pension plans, foundations and endowments that are under pressure to meet obligations -- are trying to eke out an extra return on cash that would otherwise languish in a money market fund.

...“It’s difficult to justify sitting in cash for 24 months, so they’re having to think about different ways to fund these types of mandates.”

The amount of dry powder -- money raised but not yet invested -- could hit $1 trillion by the end of year in private equity alone, after reaching $963 billion in July, according to researcher Preqin Ltd. That’s pushing out the average time it takes for new commitments to start being invested to as long as three years, up from one year previously, according to State Street.

...the more often chosen route is to deploy against a capital-weighted index. They are buying index exposure.”

ETFs, which have grown to more than $4 trillion in assets, can give investors instant and diversified exposure to an asset class, while allowing for a quick liquidation to meet obligations.

... pension clients, at least in Europe, are increasingly using ETFs to create so-called liquidity sleeves for their portfolios.

...how they can use ETFs for asset allocation and cash management.

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... Carlyle Group LP’s David Rubenstein has said the fundraising market is now the best he’s ever seen, and Apollo Global Management LLC last month raised the biggest-ever buyout fund, with almost $25 billion committed. London-based Oakley Capital has amassed about 800 million euros ($938 million) for its third mid-market private equity fund, people familiar with the matter said this week, more than 50 percent higher than its last capital raise.

https://www.bloomberg.com/news/articles/2017-08-09/with-1-trillion-waiting-for-deals-investors-make-do-with-etfs