Risk adjustment

Expert Voices

Short-term African investment may slow despite bright growth prospects

A supporter of Martin Fayulu, the runner up in the Democratic Republic of the Congo's elections, protests in Kinshasa, against the election of Felix Tshisekedi as president of the DRC.
A supporter of Martin Fayulu, runner-up in the Democratic Republic of the Congo's contested elections, protests in Kinshasa against Felix Tshisekedi's win, on Jan. 21. Photo: John Wessels/AFP via Getty Images

The new year is off to a rocky start for African countries: Democratic Republic of the Congo held a disputed presidential election tainted by allegations of fraud; protests in Zimbabwe over a 150% hike in fuel prices have sparked a violent government crackdown; and a horrific terrorist attack that hit an upscale hotel and commercial real estate complex two weeks ago in Nairobi, Kenya, killed 21 people.

Why it matters: Recent and potential civil unrest will result in lower investment in a region of the world that needs it most. Foreign direct investment flows into African markets fell by 21% to $42 billion in 2017 and are predicted to decrease further over the next three years.

Why it's the worst time in years to run a hedge fund

The amount of money fleeing into money-market mutual funds hit $81 billion last week, the largest such flow on record. Meanwhile, the flows out of equity mutual funds, at $46 billion, were almost double any other week on record.

Data: Hedge Fund Research; Chart: Andrew Witherspoon/Axios

The big picture: What you're seeing is a risk-off flight to boring safe assets — which means that now is the worst time in years to try to open up a new hedge fund. Just 450 new hedge funds were opened in the first three quarters of this year, the lowest number in a decade.

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