There’s lots of money out there … for good investments

# There’s lots of money out there … for good investments I frequently hear “Why aren’t ‘we’ funding more ambitious projects? There’s lots of money out there!” Ignoring the fact that the ‘we’ probably doesn’t include anybody in the conversation, it’s important to add nuance to the idea that “there’s lots of money out there” not to be pedantic but to create knowledge that enables actions. Another way to look at it is that if the statement “there’s lots of money out there” is true, it creates a contradiction with the fact that there are many excellent projects that scrape by or don’t exist because they can’t get funding which needs to be explained away. First let’s look at where the statement comes from in the first place. * The stock markets are at all-time highs * Interest rates are extremely low * Technically the money supply is huge Then let’s look at who controls that money and what their incentives are. * Pension funds control a massive amount of assets - in 2018 pensions funds managed [15 trillion dollars](http://www.oecd.org/daf/fin/private-pensions/Pension-Funds-in-Figures-2019.pdf) in the US. * Another massive pool of money is in endowments. Endowments were [1.7 trillion dollars](https://capitalresearch.org/article/how-much-money-is-in-nonprofit-endowments-in-america/) in 2017. For comparison the total US stock market capitalization was [36 trillion dollars](https://siblisresearch.com/data/us-stock-market-value/) in 2020. And total AUM in 2018 is $43T according to [this McKinsey report](https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Beyond%20the%20Rubicon%20Asset%20management%20in%20an%20era%20of%20unrelenting%20change/Beyond-the-Rubicon-NA-asset-management-2019.pdf) [Retirement Assets are $33.1 Trillion in 2020](https://www.ici.org/research/stats/retirement/ret_20_q3) ![](6825_Figure1.jpg) There doesn’t seem to be a great way to do the full accounting, but just by orders of magnitude the vast majority of that money is controlled by pension funds and endowments. One might think “great! Endowments and pensions are long-term thinking institutions, so they would be ideal to invest in things that wouldn’t pay out for a while.” The trick is t Finally let’s look at the nature of the projects that aren’t being funded. Perhaps it’s unfair, but this is probably never coming from people who own or deploy that money. ### Related * [[Luke Constable Podcast]] * [[§Philanthropy and Non-Profit Constraints]] * [[There is a significant class of innovations that would create drastically less value for the world if their value had been captured by their creators]] * [[Precommercial scitech funding is taste based]]  [Web URL for this note](http://notes.benjaminreinhardt.com/There’s+lots+of+money+out+there+…+for+good+investments) [Comment on this note](http://via.hypothes.is/http://notes.benjaminreinhardt.com/There’s+lots+of+money+out+there+…+for+good+investments)