As a result of the on-going debt crisis in the Eurozone and slowing emerging markets, 2011 turned out to be a relatively difficult year for global capital markets. Most of these macro-economic issues also persisted in the first half of 2012. In 2011, low investor confidence led investors to shy away from the riskier equity markets and look for relatively safer bets in the debt markets. Interest in commodities increased among the fund houses due to their ability to act as risk diversification tools. Gold emerged as the biggest beneficiary of this trend and continued its bull run in 2011.

A combination of difficult market environment, increased scrutiny by market regulators, and rising cost pressure is reshaping the way the buy-side firms operate.

This paper is part of our series What You Need to Know: Capital Markets which focuses on emerging trends in capital markets. Please see the companion papers Trends in the Global Capital Markets Industry 2012: Financial Intermediary Firms and Trends in the Global Capital Markets Industry 2012: Sell-Side Firms.