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World’s 2nd-Biggest Sovereign Fund Sees Oil Glut Until Mid-2017

Posted on 23 June 2016 by VRS  |  Email |Print

The global oil glut will probably persist until at least next summer as markets take time to absorb excess crude in storage, according to the head of research at the world’s second-largest sovereign wealth fund.
Supply and demand for oil are coming back into balance, and the response of shale producers to rising prices will help determine how high crude can go, Christof Ruehl, the global head of research at Abu Dhabi Investment Authority, said……………………………………….Full Article: Source

GCC sovereign wealth funds adjusting long-term strategies

Posted on 20 June 2016 by VRS  |  Email |Print

As an inevitable consequence of a prolonged period of low oil prices, Gulf-based sovereign wealth funds are readjusting their long-term strategies, selling their financial assets abroad and pulling the money out at a rapid rate to fill the gaping budgetary holes. Also, there has been increased pressure on the them to invest in the local market in order to support projects troubled by budgetary cuts.
During the “golden era” (until 2014), when black gold was routinely traded above $100 per barrel, Gulf countries recorded capital inflow reaching epic proportions. They entrusted their enormous surpluses to their Sovereign Wealth Funds (SWF) which heavily invested in a variety of assets around the globe. But the financial circumstances of the Arab Gulf countries have changed dramatically………………………………………..Full Article: Source

Watchdogs exempt sovereign wealth and pension funds from study

Posted on 17 June 2016 by VRS  |  Email |Print

Sovereign wealth funds and pension funds have won a temporary break from tighter regulatory scrutiny, as global watchdogs exempted them from an ambitious study aiming to curb systemic risks from financial institutions that are not banks or insurers.
SWFs — which have grown in number and size in the past decade due to an accompanying spike in commodity prices — have an estimated $7tn in assets under management, according to the Sovereign Wealth Fund Institute, while pension funds manage about $35tn of assets across the globe………………………………………..Full Article: Source

SWF acquisitions rise 62 percent, highest level since 2008

Posted on 13 June 2016 by VRS  |  Email |Print

The value of acquisitions involving sovereign wealth funds has risen 62 percent to $28.6 billion in the year to date, the highest level since 2008, Thomson Reuters data showed on Friday. The Qatar Investment Authority (QIA), a sovereign wealth fund, this week agreed to buy a 43-story Singapore office tower for $2.5 billion from the world’s largest asset manager Blackrock, adding to a flurry of mergers and acquisitions (M&A) by sovereign wealth funds.
Industrials, financials and real estate account for nearly 80 percent of year-to-date sovereign wealth fund M&A activity, up from 33 percent a year ago, the data showed………………………………………..Full Article: Source

Auditing sovereign wealth funds: Qatar Investment Authority at the back of the class

Posted on 07 June 2016 by VRS  |  Email |Print

Despite a lot of changes in Qatar in the last few years, the country’s sovereign wealth fund, the Qatar Investment Authority (QIA), is still getting extremely bad marks from international auditors.
In the past few months, QIA officials announced fund managers are making big moves toward investing $35 billion in U.S. interests while opening an office in New York. The fund has hired top finance professionals from firms such as Citibank and Morgan Stanley. But none of that has, as yet, been enough to move the QIA from the bottom of the barrel in the eyes of organizations charged with monitoring sovereign wealth funds around the world………………………………………..Full Article: Source

Saudi’s massive Uber investment: What the analysts think

Posted on 03 June 2016 by VRS  |  Email |Print

News that Saudi Arabia’s sovereign wealth fund has pumped $3.5 billion into ride-hailing app Uber – reportedly the largest single investment ever made in a private firm – is a sign of new things to come, analysts say. The massive stake in San Francisco-based Uber, which values itself at around $62.5 billion, gives the kingdom’s Public Investment Fund a share of about 5 percent. It also gives Saudi a seat on Uber’s board of directors.
The announcement marks the first major foreign investment by the kingdom’s wealth fund since its April rollout of ‘Vision 2030,’ a plan to transform the country’s economy by the end of the next decade, and marks a break from a long-held focus on securing conservative, low-risk foreign assets………………………………………..Full Article: Source

Saudi Arabia invested $3.5 billion in Uber. That could be bad news for the global economy

Posted on 03 June 2016 by VRS  |  Email |Print

Uber has raised an astonishing $3.5 billion from Saudi Arabia’s sovereign wealth fund. It’s one of the biggest venture capital investments in history and brings Uber’s overall fundraising haul to $11 billion. But while Uber is bragging about the investment, it could reveal a troubling trend in investment trends overall.
In the long run, economic growth depends on our ability to convert cash into productive assets like factories, trucks, machinery, or computer software. But for the most part, recent “investments” in Uber aren’t like that. Uber is planning to use its billions to fund brutal, zero-sum price wars with competitors around the world………………………………………..Full Article: Source

Oil slump blamed for falloff in assets

Posted on 31 May 2016 by VRS  |  Email |Print

The decline in oil prices had a trickle-down effect on money managers that run assets for sovereign wealth funds in 2015. Total assets managed for sovereign wealth funds by money managers in Pensions & Investments’ universe were $1.04 trillion as of Dec. 31, down 13.7% from 12 months earlier.
In fact, every manager among the top 10 ranked by sovereign wealth fund assets under management recorded declines in those assets during 2015. State Street Global Advisors had the most sovereign wealth fund assets under management in 2015, at $103.4 billion, but still saw assets fall 8.8% from 2014. BlackRock (BLK) Inc. (BLK) was second in 2015, with $79.7 billion, down 14.4% from a year earlier………………………………………..Full Article: Source

The Take-Off of the Nigeria Sovereign Wealth Fund

Posted on 30 May 2016 by VRS  |  Email |Print

Professor Gordon L. Clark and Dr. Ashby Monk are two researchers known for their extensive work on Sovereign Wealth Funds (SWFs). Regular publications arising from their distilling research initiatives on different aspects/issues affecting sovereign wealth funds in all parts of the world get posted on the Oxford SWF Project website.
Policy makers, practitioners and other researchers regularly enrich their knowledge and understanding on the SWF subject matter by visiting this website from time to time. Under recent publications on this website is a paper jointly authored by Professor Gordon L. Clark and Dr. Ashby Monk and published with the link titled; Modernity, Institutional Innovation and the Adoption of Sovereign Wealth Funds in the Gulf States………………………………………..Full Article: Source

Key questions raised by the $2 trillion Saudi wealth fund plan

Posted on 27 May 2016 by VRS  |  Email |Print

Saudi Arabia is planning to expand its sovereign wealth fund into the world’s largest. The Public Investment Fund could eventually control more than $2 trillion, according to Deputy Crown Prince Mohammed bin Salman, making it big enough to buy the world’s four largest publicly traded companies.
The fund is at the center of efforts to diversify revenue from oil under an economic transformation plan known as Vision 2030. The 84-page Vision blueprint includes plans to restructure the country’s finances, administration and reshape oil giant Saudi Aramco into an industrial and energy conglomerate………………………………………..Full Article: Source

Sovereign Wealth Funds Investing In Infrastructure

Posted on 20 May 2016 by VRS  |  Email |Print

Using extracts from the 2016 Preqin Sovereign Wealth Fund Review and data from Preqin’s Infrastructure Online, Joe McGee and Selina Sy examine these investors’ plans and preferences concerning infrastructure investments.
Sovereign wealth funds continue to1 capture attention as a result of their ever growing assets under management (AUM) and corresponding influence on global financial markets. Despite market volatility and the ongoing decline in commodity prices, which has reduced the capital available to some sovereign wealth funds, AUM managed by these investors reached $6.51tn in March 2016. This is over double the aggregate assets held in 2008 ($3.07tn), the year Preqin launched its first Sovereign Wealth Fund Review………………………………………..Full Article: Source

Abu Dhabi to ease budget spending cuts, says ratings agency Moody’s

Posted on 17 May 2016 by VRS  |  Email |Print

Fitch estimates that the Abu Dhabi government sold about $27 billion of sovereign wealth fund assets to help it finance its deficit in 2015. It can finance its deficit by drawing down on the assets of the Abu Dhabi Investment Authority, the sovereign wealth fund that manages between $475bn and $773bn in assets, according to different estimates.
“Abu Dhabi is probably one of the best placed economies in the Gulf to cope with low oil prices,” said Jason Tuvey, an emerging markets economist at Capital Economics. “They’ve got enormous savings in their sovereign wealth funds and debt levels are low, so they can afford to prolong the adjustment for an extended period of time.” Abu Dhabi sovereign wealth funds hold assets under management equivalent to between three and four times the annual economic output of the emirate………………………………………..Full Article: Source

The State of Russian Sovereign Wealth Fund Assets

Posted on 13 May 2016 by VRS  |  Email |Print

Much has changed since a decade ago. Russia’s fast growing spurt in oil is now in a different phase, as the price of crude oil is impacting the country. Russia’s Ministry of Economic Development in a 2017-2019 study forecasts the amount of assets in both the Russian Reserve Fund and National Welfare Fund will fall to 2 trillion roubles by 2020.
When Western relations with Russia were stronger, a number of private equity executives were engaged with the RDIF, including TPG’s David Bonderman, Apollo’s Leon Black, Permia’s Björklund and Blackstone Group’s Stephen Schwarzman………………………………………..Full Article: Source

The Middle East’s 10 Biggest Sovereign Wealth Funds (For Now)

Posted on 12 May 2016 by VRS  |  Email |Print

Saudi Arabia’s plan to create a $2 trillion sovereign wealth fund has set an ambitious new standard for state-run investment vehicles. These funds are an increasingly common sight around the world, but particularly in the Middle East, where oil-rich governments like to squirrel away money when oil prices are high in preparation for leaner times.
The Sovereign Wealth Fund Institute (SWF Institute) lists 79 funds in its rankings, with 20 of them in the Middle East and North Africa. Now that the price of a barrel of oil has slumped, these stores of wealth are coming into play, helping governments to deal with their budget deficits so they can still provide all the services their citizens have come to expect. But which ones have the most money?……………………………………….Full Article: Source

Preqin says SWFs are adopting ‘safer’ real estate strategies

Posted on 06 May 2016 by VRS  |  Email |Print

According to the latest data from Preqin, core real estate is most targeted strategy, while distressed opportunities see large decline In its latest review, Preqin finds that sovereign wealth funds investing in real estate in 2016 have moved away from higher risk investment strategies, and are increasingly targeting strategies with a lower risk profile.
Core real estate is now the most utilised strategy, employed by 72% of sovereign wealth funds, up from 57% in 2015. Similarly, core plus investments are now sought by 44% of sovereign wealth funds, up from 39% a year ago, says the data provider. Some 85% of sovereign wealth funds seek direct investment in real estate, the most attractive route to market………………………………………..Full Article: Source

Here Are 4 Ways to Invest Like the Pros at Sovereign-Wealth Funds

Posted on 05 May 2016 by VRS  |  Email |Print

In the world of investing, there are the small players, big players and then the biggest players of all: sovereign-wealth funds, which are state-owned investment funds. The world’s SWFs manage trillions of dollars’ worth of investments on behalf of the governments that raised these funds through different forms of taxes, most frequently, by taxing natural-resource extraction.
The funds are usually set aside for when they are needed but in the meantime are allocated in a wide array of investments. The largest SWF is Norway’s, Norway Government Pension Fund Global, which as of last June controlled $873 billion, according to the Sovereign Wealth Fund Institute………………………………………..Full Article: Source

Major Gulf Sovereign Fund Retools Fund Manager Strategy

Posted on 03 May 2016 by VRS  |  Email |Print

The oil crisis (for those who produce oil) has shed some light on the practices of Gulf sovereign investors. Sizable fund redemptions by SWFs occurred in 2015. For example, Northern Trust faced major outflows from several sovereign wealth fund clients, between March 2015 and March 2016.
Plain-vanilla mandates are being challenged, can they be effectively replicated by using investment factors? According to SWFI Compass, an RFP and opportunity intelligence tracker, increasingly all types of public investors are asking for specialist mandates in credit, real estate and real assets………………………………………..Full Article: Source

Saudi PIF, SAMA Foreign Holdings among largest sovereign wealth funds

Posted on 03 May 2016 by VRS  |  Email |Print

Saudi Arabia’s Public Investment Fund (PIF) is now the world’s 13th largest sovereign wealth fund with assets amounting to $160 billion by the end April, the Sovereign Wealth Fund Institute (SWFI) said in its latest report.
The PIF secured its ranking after gaining $154.7 billion since the end of last year. The kingdom’s SAMA Foreign Holdings fund, which placed fourth on the list, saw its assets fall by $36.3 billion over the same period to $632.3 billion. Meanwhile, the Abu Dhabi Investment Authority (ADIA) ranked second on the list with $773 billion worth of assets………………………………………..Full Article: Source

Global Growth to Influence Wealth Fund Withdrawals, ADS Says

Posted on 02 May 2016 by VRS  |  Email |Print

Global economic growth will determine whether sovereign wealth funds withdraw further funds from global markets, according to ADS Holding LLC Chairman Mahmood Al Mahmood. Funds are “there to act as a tool for governments when they’re needed,” Al Mahmood, who is also a board member at Abu Dhabi sovereign investment fund Mubadala Development Co., said.
“Is this the end of it? It depends how the economy is whether they’ll continue operating the same way they did in the past.” Sovereign funds from Qatar to the United Arab Emirates and Russia, which amassed about $7 trillion of assets as oil soared higher than $100 a barrel, have been liquidating investments after a more than 70 percent slump in crude since 2014………………………………………..Full Article: Source

Sovereign Wealth Funds Uplift Muslim World with Fajr Capital

Posted on 02 May 2016 by VRS  |  Email |Print

Fajr - Arabic for “dawn,” to symbolize hope - has a modest $700 million in capital, but its founding shareholders have much deeper pockets. Three sovereign wealth funds - the $111 billion Abu Dhabi Investment Council, Brunei Investment Agency, the sovereign fund of the oil-rich Southeast Asian sultanate, and Malaysia’s $35 billion Khazanah Nasional - joined forces with Mohammed Alsubeaei & Sons Investments Co. (MASIC) to create and nurture the young firm.
Fajr is a union of institutions that have high credibility and share the same values, says Ihsan Bafakih, CEO of MASIC. According to a 2015 report published by Spain’s ESADE business school, the 36 sovereign wealth funds based in Muslim countries account for 46 percent of the estimated $7 trillion in global sovereign wealth assets………………………………………..Full Article: Source

Vision 2030: Dawn of a new era

Posted on 29 April 2016 by VRS  |  Email |Print

At first sight, the Saudi Vision 2030 plan, unveiled this week by Deputy Crown Prince Mohammed bin Salman, seems to break with the Kingdom’s evolutionary approach. The implications of a radical realignment of the economy are profound.
The biggest headline change is the part-privatization of Aramco. The money raised will form the basis of the $2 trillion sovereign wealth fund. Other than this, the deputy crown prince’s plan in fact takes forward initiatives that have long been recognized. He has given concrete form to long-held ambitions………………………………………..Full Article: Source

Sovereign wealth funds move into real estate amid volatile stock markets

Posted on 28 April 2016 by VRS  |  Email |Print

Real estate is now a prime play for sovereign wealth funds (SWFs) as equity markets remain unpredictable, said an analyst Wednesday. The Sovereign Wealth Fund Institute president Michael Maduell said, “They are looking for long-term investments where they can lock up their capital and not have to continually reinvest that capital.”
The institute analyzes investments by public asset owners such as SWFs and other long-term governmental investors. Vehicles such as pension funds and endowments are also increasing investing in real estate and infrastructure, he told CNBC’s “Squawk Box” on Wednesday………………………………………..Full Article: Source

Is Saudi Arabia the next failed state?

Posted on 27 April 2016 by VRS  |  Email |Print

Saudi Arabia has been a hot bed of bad news recently. First, there was their horrifying war in Yemen, then their empty threat to start selling off U.S. debt. Most recently, the 30-year-old Deputy Crown Prince Mohammad bin Salman, who heads the Saudi Council for Economic and Development Affairs (and also serves as defense minister) laid out a new plan, dubbed “Vision 2030,” to transition the country away from selling oil.
While it may sound positive — vision! less oil! — the plan is actually pretty ominous. And without oil, the Saudi state has little else holding it together. The result could be yet another chaotic failed state in the Middle East — and this time in the home of Islam’s holiest sites………………………………………..Full Article: Source

Saudi Arabia’s growth plan: 0% income tax and a giant wealth fund

Posted on 26 April 2016 by VRS  |  Email |Print

Saudi Arabia has no plans to introduce income tax any time soon, despite the damage done to its finances by the oil price crash. The kingdom made clear Monday that taxes on income or basic goods are not part of its 15-year strategy for breaking the economy’s dependence on oil.
Riyadh’s has outlined an ambitious plan to create a huge sovereign wealth fund, which will invest at home and abroad to diversify the economy and create new revenue streams for the government. It says the fund will be worth 7 trillion riyals ($1.9 trillion) by 2030. That’s more than double the size of Norway’s sovereign wealth fund, the world’s biggest………………………………………..Full Article: Source

What’s In Saudi Arabia’s Blueprint for Life After Oil?

Posted on 26 April 2016 by VRS  |  Email |Print

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman unveiled his “Saudi Vision 2030” to reduce the kingdom’s reliance on oil. The blueprint, approved by King Salman, includes plans to sell less than 5 percent of Saudi Arabian Oil Co., or Aramco, the creation of the world’s largest sovereign wealth fund and raising non-oil revenue.
Here’s a guide to the main elements of the plan, announced on Monday in Riyadh and during Prince Mohammed’s interview with Saudi-owned Arabiya television. The prince had disclosed some of the proposals in two interviews with Bloomberg News………………………………………..Full Article: Source

SWFs ‘Not to Blame for Equity Crash’

Posted on 26 April 2016 by VRS  |  Email |Print

Market commentators that have blamed sovereign wealth funds (SWFs) for driving the recent equity market sell-off may be wide of the mark, according to advisory firm GeoEconomica.
The majority of drawdowns from SWFs last year were smaller than their annual investment returns, wrote GeoEconomica Managing Director Sven Behrendt in a note published by the International Forum of Sovereign Wealth Funds. This is despite a series of commentaries claiming large withdrawals from SWFs have led to price falls across stock markets………………………………………..Full Article: Source

Five Questions About The New Saudi Economic Plan

Posted on 25 April 2016 by VRS  |  Email |Print

The Kingdom will introduce its plan for an economic and financial restructuring of its sovereign wealth fund. On the scale of $2 trillion, this new Public Investment Fund (PIF) would be the largest in the world and would include a compelling IPO of a small portion of Saudi Arabia’s national oil company, Saudi Aramco.
The country relies almost exclusively on oil profits to fund the government. No one outside of the government knows the exact numbers, but some estimates say 90% of the Kingdom’s budget comes from Aramco………………………………………..Full Article: Source

Commodities slump stalling sovereign wealth growth

Posted on 21 April 2016 by VRS  |  Email |Print

Sovereign wealth funds in commodities economies are being forced to sell off assets to manage government deficits, slowing growth for the sector. The 2016 Preqin Sovereign Wealth Fund Review shows that while assets held in sovereign wealth funds collectively grew by $200 billion to hit $6.51 trillion in the year to March 2016, this growth was significantly slower than in previous years.
According to Preqin premium publications manager Selina Sy, growth has been hampered largely by sovereign wealth funds in oil-producing nations “fulfilling their function by providing for budget deficits in more challenging economic periods.” In some cases, funds like this saw their assets under management more than halved as a result………………………………………..Full Article: Source

Global sovereign wealth fund assets rise to $6.51 trillion

Posted on 20 April 2016 by VRS  |  Email |Print

Sovereign wealth fund (SWF) assets increased by $200 billion in the year to March 2016 and now stand at $6.51 trillion despite recent market volatility and low oil prices, data from research provider Preqin showed on Tuesday.
That represents a yearly growth rate of about 3 percent, compared with rates of 16-17 percent in previous years. But SWFs now hold more than double the assets seen in 2009 when the aggregate AUM totalled $3.22 trillion. The growth was driven by non-commodity funds, which added some $290 billion in assets, whilst SWFs reliant on windfall revenues from oil and gas lost $10 billion, Preqin said………………………………………..Full Article: Source

Preqin: Sovereign wealth fund assets up 3.2% in year; oil-dependent funds drop

Posted on 20 April 2016 by VRS  |  Email |Print

Assets held by sovereign wealth funds across the globe increased 3.2% to $6.51 trillion in the 12-month period through March, driven by growth in non-commodity funds, Preqin said. The research firm reported that funds that do not derive their assets from commodities added $290 billion in assets over the year, while funds reliant on hydrocarbon assets, including oil, lost $10 billion.
Other commodities funds lost more than half of their wealth, dropping by more than half to $50 billion, from $130 billion a year earlier. Preqin, which analyzed the growth and asset allocations of 74 sovereign wealth funds, highlighted in its research the effect of the oil price collapse on investors………………………………………..Full Article: Source

Newton Capital Sees Sovereign Wealth Funds Easing Retrenchment

Posted on 12 April 2016 by VRS  |  Email |Print

Sovereign wealth funds reined in their investments at a slower pace in the first quarter, according to Helena Morrissey, chief executive officer of London-based Newton Capital Management Ltd.
Funds have been liquidating assets and repatriating capital to shore up domestic economies rocked by slumping oil and commodity prices. They pulled “a huge amount” from markets worldwide in late 2015, Morrissey, who helps oversee $69.2 billion, said in a Bloomberg Television interview with Manus Cranny………………………………………..Full Article: Source

Sovereign wealth funds like what they see in U.S. middle market

Posted on 12 April 2016 by VRS  |  Email |Print

Sovereign wealth funds manage staggering sums of money. But that doesn’t mean they’re so big they only invest with the likes of Blackstone Group, Carlyle Group and Kohlberg Kravis Roberts & Co.
From the New Zealand Superannuation Fund to the Saudi Arabia General Organization for Social Insurance, from the Alaska Permanent Fund Corporation to the Abu Dhabi Investment Authority, sovereign wealth funds are channeling money into U.S. mid-market funds………………………………………..Full Article: Source

The Truth Behind Saudi Arabia’s $2 Trillion Sovereign Wealth Fund

Posted on 11 April 2016 by VRS  |  Email |Print

Though Saudi Arabia’s plan of a $2 trillion fund exudes power and confidence, raising a megafund of that size is practically next to impossible, unless crude oil prices see a significant appreciation or Saudi Arabia plans to sell a higher portion of Aramco.
The Saudi Deputy Crown Prince Mohammed bin Salman has outlined ambitious plans for the future of the Kingdom in his five-hour long interview with Bloomberg. He wants to reduce Saudi Arabia’s dependence on oil; however, there are numerous hiccups to his proposed plans………………………………………..Full Article: Source

Temasek Sees Valuation Concerns in Chinese Technology Industry

Posted on 06 April 2016 by VRS  |  Email |Print

There is valuation concern within China’s technology industry after investors piled into the sector in the last couple of years, said an executive of Temasek Holdings Pte, an investor in e-commerce giant Alibaba Group Holding Ltd. before its 2014 initial public offering.
The Singapore state investment company is considering moving to earlier-stage investments in the industry as valuations get higher for companies that move closer to initial public offerings, said Wu Yibing, Temasek’s China head, at the Credit Suisse Asian Investment Conference in Hong Kong on Tuesday………………………………………..Full Article: Source

Sovereign Funds: Fiscal Framework, Governance and Investment

Posted on 24 March 2016 by VRS  |  Email |Print

Since the global financial crisis of 2008-2009 and the slowdown of economic growth globally, popular demands for ad hoc use of sovereign wealth to support growth has grown visibly. New funds continue to be created as both the sector and its assets grow.
Yet to prevent rapid dissipation of sovereign wealth as fiscal resources for countercyclical fiscal policy, clear fiscal rules and fiscal frameworks are needed to complement the governance structure and investment strategy. Sovereign Funds draws on industry practitioners, industry observers and academics to present the latest thinking on state-owned investment funds from a global perspective. With exclusive insights, case-study chapters and in-depth sectoral analysis, the contributors assess the present state of sovereign wealth funds offer signposts for future development. (Press Release)

Norwegian wealth fund has a New York state of mind: Gadfly

Posted on 10 March 2016 by VRS  |  Email |Print

On the website for Norway’s Sovereign Wealth Fund, a hypnotic and constantly-changing ticker indicates how much kroner the fund is losing and, mostly, gaining. People in London and New York worried about property prices might find it calms their nerves.
The US$830 billion (S$1.14 trillion) Government Pension Fund Global, the biggest sovereign wealth fund, reported results for 2015 on Wednesday: an overall return of 2.7 per cent, achieved despite volatile currency and equity markets, negative interest rates and worries about global growth. Still, that’s its weakest return in five years and worse than the average annual return of 3.7 per cent (after inflation and management costs) since 1998 when the fund’s current management structure was set up………………………………………..Full Article: Source

U.A.E. Central Banker Says SWF Withdrawal Reports `Overblown’

Posted on 03 March 2016 by VRS  |  Email |Print

Khalifa Al Kindi, chairman of the United Arab Emirates central bank, said that media coverage of withdrawals by sovereign wealth funds has been exaggerated, amid investor concern that the funds are pressuring global stock markets.
“I think it’s overblown,” Al Kindi, who is also founder of the Abu Dhabi Investment Council, said Wednesday at a conference in the city. “We have been exposed to that in the 80s and early 90s and now with the oil price at these levels you will be using your SWF to withdrawn from. We still have a long way before borrowing from outside world.”……………………………………….Full Article: Source

Sovereign-wealth funds

Posted on 26 February 2016 by VRS  |  Email |Print

China’s four sovereign-wealth funds have $1.5 trillion-worth of assets between them. None is larger than Norway’s $825 billion government pension fund, according to the Sovereign Wealth Fund Institute (SWFI), a think-tank. Norway’s fund, like many others, is fed by revenues from natural resources: oil-and-gas-based sovereign-wealth funds make up 56% of the market by asset value.
The falling oil price means many countries sold assets last year to finance budget deficits. Outflows have mainly been from liquid assets like equities, which may have contributed to stockmarket turbulence this year. The SWFI predicts that another $404 billion could be withdrawn from listed equities in 2016………………………………………..Full Article: Source

Are $7 Trillion Sovereign Wealth Funds Behind Market Plunge?

Posted on 23 February 2016 by VRS  |  Email |Print

2016 has featured a poorly explained stock market plunge. Without a clear explanation, investors are at a loss about how to make intelligent decisions. If oil is the culprit, should investors buy now that OPEC and others are getting together to freeze production? If markets China’s slowing growth and debt woes are the cause, should they cheer now that China has replaced its markets regulator or will its markets continue to lurch awkwardly?
Since these stories are blasted around the world, it is hard to see how they could give an investor any advantage in trying to beat the market. I think that the real reason for market movements — the ebb and flow of capital to and from equities — is considered protected speech by securities regulators………………………………………..Full Article: Source

How to invest like a sovereign wealth fund

Posted on 17 February 2016 by VRS  |  Email |Print

Sovereign wealth funds (SWF) are like a country’s savings account. They’re money a country doesn’t need right now that’s saved for a future rainy day. And although SWFs control trillions of dollars, individual investors can still learn a lot about portfolio management from them.
As of December 2015, there were 79 SWFs around the world, managing US$7.2 trillion, according to the Sovereign Wealth Fund Institute. That’s more than all the world’s hedge funds and private equity funds combined. And it’s more than double the US$3.4 trillion controlled by SWFs at the beginning of 2008………………………………………..Full Article: Source

Free Lunch: How sovereign wealth funds can save capitalism

Posted on 16 February 2016 by VRS  |  Email |Print

Feel the force: Many worry that with the collapse in commodity prices, sovereign wealth funds will destabilise markets as they sell off assets. In the short run, SWFs may indeed cause volatility, as the International Monetary Fund warned in October. But in the long run, they should be seen as a force for good — and be used as such much more than they have been.
In corporate capitalism, the bulk of economic activity is carried out through a system that involves two dimensions of decentralised decision making. Goods and services are made and sold out by the dispersed, impersonal production units we call corporations………………………………………..Full Article: Source

10 things you probably don’t know about sovereign wealth funds

Posted on 02 February 2016 by VRS  |  Email |Print

Sovereign wealth funds are massive investment vehicles with trillions of dollars in assets. However, these wealth giants are little known and less understood than other types of investments vehicles.
We’ve assembled 10 facts to help you figure out what sovereign wealth funds are all about. Check them out below. The Kuwait Investment Authority was the first sovereign wealth fund ever created. In light of the discovery of oil, this fund was established in 1953 to invest excess oil revenues. One of the largest wealth funds in the world, it is estimated to have over $592 billion in assets………………………………………..Full Article: Source

Analysis: Norway’s Government Pension Fund Global

Posted on 02 February 2016 by VRS  |  Email |Print

A greater focus on real assets through the introduction of an unlisted infrastructure portfolio, and the expansion of the real estate exposure of Norway’s NOK7.1trn (€733bn) sovereign wealth fund, could soon bring to an end one of the great certainties among asset owners – the Government Pension Fund Global’s stable, almost static asset allocation.
The fund may also take on greater equity risk, and increase its strategic allocation beyond 60%, which currently means it owns about 2.5% of the European listed market and 1.3% of all listed stocks. The potential changes mark a sea change, as the strategic asset allocation at Europe’s largest asset owner has remained largely unchanged for nearly a decade………………………………………..Full Article: Source

Aberdeen Sees Sovereign Assets Shrink $19 Billion in Two Years

Posted on 28 January 2016 by VRS  |  Email |Print

Aberdeen Asset Management Plc has seen sovereign wealth-fund assets shrink by about 13 billion pounds ($19 billion) since a peak in 2013 as clients from oil-dependent countries cashed out and markets slumped.
Chief Executive Officer Martin Gilbert said SWF’s now represent about 2.5 percent, or 7 billion pounds, of Aberdeen’s total assets under management. That’s down from 10 percent two years ago. Aberdeen rose Wednesday after the company said outflows slowed in the first quarter and more cost cuts were announced………………………………………..Full Article: Source

Are Sovereign Wealth Fund Liquidations Responsible for Current Market Turmoil?

Posted on 21 January 2016 by VRS  |  Email |Print

The plunge continues apace. The S&P is now well below its August 24 panic lows, with the Nasdaq knocking on the door within 100 points of that critical support zone. The Dow Jones is about 300 to 400 points away.
With some blaming the rout on the possibility of more Federal Reserve rate hikes and others looking towards China, the real answer may actually be oil. The first Fed rate hike has not even remotely affected credit levels, so its effect on stocks can only be psychological and temporary. The December rate hike only served to neutralize excess bank reserves by $250 billion, and with $2.12 trillion (see table 2 column 1) in excess to go, there is plenty of room to hike rates further without affecting the credit supply at all………………………………………..Full Article: Source

Global Pension and Sovereign Wealth Fund Investment in Hedge Funds

Posted on 18 January 2016 by VRS  |  Email |Print

Our new industry survey, “Global Pension and Sovereign Wealth Fund Investment in Hedge Funds: The Impact of Direct Investing”, conducted through in-depth one-on-one interviews with global investors managing $1.65 trillion in assets under management as well as hedge fund managers representing $186 billion in assets under management, looks at both the increase in institutional assets and how a shift to “direct” investing presents both an opportunity and a set of challenges to hedge fund managers looking for this capital.
In the report we look at the macro pension and sovereign wealth fund environment in terms of its overall capital, growing focus on “Alternatives’ and growth of hedge fund allocations from these segments. In addition, we look at which hedge fund are optimal targets for pension and sovereign wealth fund investors, and discuss why size is a critical factor and how the criteria required to pass the institutional threshold have expanded since 2008………………………………………..Full Article: Source

Sovereign Wealth Funds Spent Less in 2015

Posted on 12 January 2016 by VRS  |  Email |Print

The total direct transaction amount in 2015 by sovereign funds is US$ 114 billion compared to US$ 122 billion in 2014. However, when calculating all public investors, which includes large public pensions, direct transactions total US$ 211 billion in 2015 versus US$ 186 billion in 2014.
Leading the charge for asset-rich pensions were Canadian institutional investors such as Canada Pension Plan Investment Board (CPPIB), Ontario Teachers’ Pension Plan (OTPP) and Caisse de dépôt et placement du Québec (CDPQ)………………………………………..Full Article: Source

Sovereign Funds Liquidating Assets Increases Pressure on Global Economies

Posted on 12 January 2016 by VRS  |  Email |Print

Tumbling oil prices are affecting more than just energy firms. The ripple effect has now hit global asset managers, as governments in the Gulf and beyond – short on cash – are withdrawing billions of dollars, the Financial Times recently reported.
State institutions withdrew at least $19 billion in the third quarter, mostly to close the gaps in national budgets and reduce borrowing, the piece stated – with more money is expected to be withdrawn in the coming months. Moreover, the Wall Street Journal reported that sovereign-wealth funds yanked roughly $100 billion from asset managers in the six months to Sept. 30………………………………………..Full Article: Source

Sovereign wealth fund deals fall 13 pct in fourth quarter

Posted on 11 January 2016 by VRS  |  Email |Print

Sovereign wealth funds made $23.5 billion worth of overseas acquisitions in the fourth quarter of 2015, down 13 percent from the third quarter, although big infrastructure and property deals remained popular.
Thomson Reuters data showed that sovereign wealth funds (SWFs), which invest windfall revenues from oil and other commodities for future generations, were involved in 25 deals during the October-December period, down six from the previous quarter. Over the full year, SWFs invested in 127 transactions, down from 148 in 2014. The total value of 2015’s deals amounted to $68.7 billion, down 6.9 percent from $73.8 billion in 2014………………………………………..Full Article: Source

Sovereign wealth funds: What is Santiago for?

Posted on 07 January 2016 by VRS  |  Email |Print

Despite signing up to the Santiago Principles, most sovereign wealth funds don’t observe them, nor do they have to. Isn’t it time the markets lost patience with their ‘I signed, therefore I am transparent’ approach?
Peter Costello faced a challenging gig. The chairman of the Australian Government Future Fund, better known to many as the country’s longest-serving treasurer, under John Howard’s government, was presenting a keynote speech at a sovereign wealth funds conference in Milan, but found himself addressing a room full of people milling around a buffet table………………………………………..Full Article: Source

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