The rise of four new financial power brokers is causing a good deal of unease around the world. Increasingly influential, but traditionally secretive, these players—investors from oil-exporting nations, Asian central banks, hedge funds and private-equity firms—are stirring fears of the wealthy outsider everywhere they turn.

With oil prices running high, investors from petrol powers have become a major target of protectionist countermeasures. Asian central banks now hold so much American debt, rumors of a shift in China’s appetite for U.S. Treasuries send tremors through U.S. credit markets. The top hedgefund executives, who manage money for wealthy clients, have become so

spectacularly well paid that the movement to restrain their power (and tax their billions) now spans the Atlantic and the Pacific. And private equity firms, which buy and sell whole companies, have been attacked as "vultures" and worse, particularly in Europe.

Much of the unease arises from the public’s lack of knowledge about who these players are, and even how much money they really control. In a new report, the McKinsey Global Institute (MGI) lays out the facts about these new "power brokers," and their growing clout and ability to shape global financial markets. And it is indeed impressive: the combined assets of the four key players have tripled since 2000 to around $8.5 trillion at the end of 2006. That is equivalent to 40 percent of the wealth held by global pension funds—striking for players that were on the fringes of financial markets just five years ago.

However, even if you assume big is bad (and we don’t), the concerns are not always well targeted. Private-equity funds, perhaps the most scrutinized of the four, are also by far the smallest. Engineers of what are called leveraged buyouts—or LBOs, in the 1980s—private-equity funds have tripled in size since 2000 and have $710 billion in investors’ capital (as of the end of 2006). But hedge funds are at least twice as large, holding assets of $1.5 trillion. If you count leverage—borrowed money hedge funds often use to boost returns—they may control as much as $6 trillion invested in financial markets. That, surprisingly, would make hedge funds the biggest power brokers, bigger even than the oil states.

In terms of dollars in hand, the tripling of world oil prices since 2002 has made petro-investors the largest of the four new power brokers. MGI estimates that oil investors have between $3.4 trillion and $3.8 trillion in foreign financial assets. Close behind are the Asian central banks, with foreign-reserve assets of $3.1 trillion—the results of soaring trade surpluses, significant foreign investment in the region and exchange-rate policies.

No matter how the current financial-market turmoil develops, the four new players are unlikely to diminish in size or market strength. One reason is that their growth has become mutually reinforcing in ways that are still not fully recognized. For example, low interest rates—resulting in part from all the money pouring into credit markets from Asia and oil exporters—have helped spur the rise of hedge funds. Hedge funds have helped fuel growth of private equity through their huge role in the credit derivatives market.

Far from being a temporary phenomenon, the new power brokers will be a prominent feature of the global landscape for years to come. If their current growth rates continue, the four power brokers would see their assets climb to $20.7 trillion by 2012—making them two thirds the size of global pension funds. But they will also grow even if oil prices fall, Asian trade surpluses decline and investor inflows into hedge funds and private equity slow. In this case, MGI projects that their assets will double over the next five years, to $15.2 trillion.

These new power brokers are here to stay and they are increasingly venturing into each other’s territory. Hedge funds are buying up companies. Asian central banks are starting to replicate the sovereign wealth funds of oil exporters. Oil exporters are creating more-sophisticated investment vehicles such as private-equity funds.

The concerns about the new power brokers are genuine—and may well be justified. But we should make judgments based on the facts—not out of an emotional response to power’s passing to a new set of actors on the financial stage. There is cause for qualified optimism that the benefits of liquidity, innovation and diversification brought by the new players will outweigh the risks.