Pension funds and insurers manage $100 trillion dollars — can they use it to help solve global problems?
Over the past century, finance has become increasingly disconnected from the physical world it depends on. Every day, trillions of dollars move through financial markets as stocks, bonds and derivatives. Much of that money never reaches the businesses, infrastructure and systems that power the real economy.
The scale of this shift is striking. In 2024, around $149 trillion worth of shares were traded on global stock markets. Yet, companies raised only $741 billion in new capital through those same markets. So, for every dollar directed to an actual business, roughly $200 simply changed hands between investors. A significant portion of global capital now circulates in secondary markets, largely disconnected from the physical economy.
As financial markets offer faster and more liquid returns, investment in real-world assets, like infrastructure and industrial systems, has declined as a share of GDP. A significant portion of global capital now circulates within secondary markets, largely disconnected from the physical economy. In a way, that money has become theoretical: capital that rarely touches the systems that sustain it.
That disconnect is becoming harder to sustain. Climate change, resource pressures and geopolitical instability are reminding investors that long-term returns ultimately depend on the resilience of the physical world.
Recent tensions around the Strait of Hormuz, through which roughly a fifth of the world’s oil and a quarter of traded natural gas pass, have highlighted how vulnerable global economies remain to disruptions in critical physical systems. Energy, food and water security have returned to the top of national agendas. At the same time, global renewable investment kept growing, despite policy uncertainty. Increasingly, the case for the energy transition is being driven by climate goals and by the need for stable energy prices and geopolitical security.
Investors are also confronting growing concentration risk. A small group of technology companies now accounts for roughly around a third of the S&P 500 and drove more than 40% of its 2025 returns; in one survey of investors managing close to $30 trillion, four in five expected a correction in 2026, naming concentration their fastest-rising risk. Many are looking for diversification beyond public markets with real assets — infrastructure that offers long-term, inflation-linked cash flows and a fundamentally different risk profile.
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