(June 13, 2014) – Football’s World Cup—soccer, if you prefer—kicked off last night and financial services companies have wasted no time in finding spurious ways to link their research to the tournament.
After Goldman Sachs last week launched a lengthy report into the economic and political statuses of all 32 competing nations, the bar had been set quite high.
Research firm Preqin has arranged 11 facts about Brazilian alternative investments into a 4-3-3 formation to illustrate the host nation’s strengths—and weaknesses—in hedge funds, real estate, infrastructure, and private equity.
These nuggets of knowledge include: Brazil-based hedge fund managers are responsible for $52 billion in assets; there are 61 private equity funds focused on Brazil currently in the market; and Brazilian pension funds with an allocation to hedge funds invest on average 4.5% in this asset class.
Elsewhere UK-based consultancy Punter Southall has compared England’s chances of lifting the coveted Jules Rimet trophy to important longevity statistics.
“England have as much chance of reaching the World Cup final in the famous Maracana as a 65-year old man has of living to 100,” wrote Martin Hunter, senior consultant at Punter Southall Transaction Services. Spoken like a true actuary.
Turning to the prospect of penalty shoot-outs, Hunter said “the odds of an ‘average’ World Cup penalty taker achieving [a 100% conversion rate] are equivalent to a 65-year old man surviving until the age of 118”. As Hunter also points out, as the world’s oldest man died on Sunday aged 111 and the oldest ever male only made it to 116, “it may be wise to hang on to your cash”. aiCIO certainly won’t be betting the Christmas party money on it.
Stéphane Barthélemy, a senior portfolio manager at State Street Global Advisers, is obviously not getting in the carnival mood. Despite all the hype about new investments in Brazil’s infrastructure in anticipation of both the World Cup and the Olympic Games in Rio de Janiero in 2016, Barthélemy simply says: “With some key economic indicators already showing a decline, the event is unlikely to have anything more than a marginal economic impact on the Brazilian economy.”
Past footballing victories are no guide to future economic performance, in other words.
Related links: Goldman Sachs: World Cup Economics (and How to Play Them)