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The rise of sovereign development funds

Posted on 11 April 2013 by VRS  |  Email |Print

Back in 2008, the IMF said that “development funds” were part of the sovereign wealth fund community; they are vehicles that “typically help fund socio-economic projects or promote industrial policies that might raise a country’s potential output growth”.
At the time, I thought these development funds were (and would remain) a rather small sub-group compared to the other sub-groups that the IMF into its definition of SWFs (i.e., stabilization funds, savings funds, reserve investment corporations, and contingent pension reserve funds). Boy was I wrong……………………………………..Full Article: Source

Why a need for 1MDB when Khazanah is there?

Posted on 04 April 2013 by VRS  |  Email |Print

TA Securities speculated that the opposition Pakatan Rakyat coming into power could spell the end of 1Malaysia Development Bhd (1MDB), and that its assets could be transferred to state-controlled investment arm Khazanah Nasional Bhd.
“Perhaps, the only difference between both sides of the divide is the fate of 1MDB,” TA Securities said in its report. The comparison between the two has been ongoing since 1MDB first came about in September 2009 - when it transferred from Terengganu Investment Authority (TIA) to federal control………………………………………..Full Article: Source

36pct dip in sovereign wealth fund investment in 2012

Posted on 26 March 2013 by VRS  |  Email |Print

Sovereign wealth fund (SWF) investments witnessed a 36 per cent dip in 2012 from 2011 levels as managers played it cautious amid global economic uncertainty. SWFs invested just $57.3 billion of fresh capital last year, in comparison with $89.5 billion in 2011, the lowest level since 2006.
As a consequence of the reduced budget, sectors such as healthcare and energy witnessed a reduction in SWF investments in 2012 vis-à-vis 2011. SWF spends on healthcare and utilities fell by more than half and their energy investments dipped by 46.8 per cent. On the other hand, SWF investment in consumer goods firms shot up by 127.9 per cent and information technology spends by 90.1 per cent in 2012 from year-ago levels………………………………………..Full Article: Source

Qatar richest country in the world: IIF

Posted on 22 March 2013 by VRS  |  Email |Print

Qatar emerged as the world’s wealthiest country in 2010 with a per capita income of $88, 559, having overtaken Luxembourg, and continued with its top ranking the next year (2011). Washington-based Institute for International Finance (IIF) has reported that Qatar’s per capita GDP at purchasing power parity (PPP) was $106,000 (QR387,000) in 2012, helping the country retain its ranking as the world’s wealthiest nation.
As for Qatar Investment Authority (QIA), the UK-based TheCityUK ranked it 12th among the world’s sovereign wealth funds in terms of asset size in the year 2012. The assets of the QIA totalled $115bn. TheCityUK said in a report titled ‘Sovereign Wealth Funds’ released this month that the profile of sovereign wealth funds had risen considerably since 2007………………………………………..Full Article: Source

Sovereign funds’ assets to gain 60pct by 2016, UBS’s Castelli says

Posted on 14 March 2013 by VRS  |  Email |Print

Sovereign wealth funds will increase their assets by 60 percent over the next three years, bolstered by rising income from commodities and exports, according to UBS AG.
State funds will manage about $8.6 trillion in 2016, up from $5.3 trillion now, according to Massimiliano Castelli, head of strategy at Global Sovereign Markets, the unit of UBS Global Asset Management that services sovereign institutions worldwide. Sovereign investors will also add more assets in emerging markets and cut holdings denominated in currencies such as the euro and the Japanese yen, he said…………………………………Full Article: Source

Sovereign wealth funds to hit record $5.6 trln by year end-study

Posted on 13 March 2013 by VRS  |  Email |Print

Sovereign wealth funds (SWFs) are set to see their assets grow to $5.6 trillion by the end of 2013, a study found, a sum more than double British GDP and underscoring their status as the world’s wealthiest investors.
SWFs, state-owned vehicles such as the Qatar Investment Authority which manage windfall revenues for future generations, have become key global market players after the financial crisis, spending an estimated $90 billion buying up stakes in Western banks including Barclays Plc for instance………………………………………..Full Article: Source

Asia accounts for 39pct of $5.2tr in sovereign assets

Posted on 13 March 2013 by VRS  |  Email |Print

Sovereign wealth fund assets increased by 8% last year to reach a record $5.2 trillion, with Asian entities accounting for $2 trillion, or 39% of the total, according to figures by the Sovereign Wealth Fund Institute and a UK financial sector body.
China has the biggest share of SWF capital by country, with $1.49 trillion, accounting for 29% of the global total of sovereign wealth. It is up from $1.14 trillion last year and is nearly twice as much as the $816 billion held by United Arab Emirates, the second-largest pool of SWF assets………………………………………..Full Article: Source

GCC SWF assets put at $1.7trn

Posted on 13 March 2013 by VRS  |  Email |Print

Strong oil prices have sharply widen the fiscal surpluses in Gulf hydrocarbon producers and this boosted the assets of their government funds to an all time high of around $1.7 trillion at the end of 2012, according to Moody’s investor service.
The assets controlled by sovereign wealth funds (SWFs) in the six-nation Gulf Cooperation Council (GCC) were nearly $700 billion higher than their level of around $one trillion at the end of 2007, the rating agency said………………………………………..Full Article: Source

Rise of African SWFs

Posted on 30 January 2013 by VRS  |  Email |Print

As African countries’ wealth grows, governments are exploring new way to manage their reserves with more fiscal responsibility, accumulate wealth and bring more transparency and accountability in how they manage their new-found riches.
Angola, Ghana and Nigeria - all major or promising hydrocarbons’ players - established sovereign wealth funds in 2012, and Tanzania expressed its intention to establish a fund to manage its oil and gas reserves. African states are relatively minor players in the global SWF industry. Major oil producers Norway and Abu Dhabi lead the way with two of the largest and successful sovereign wealth funds………………………………………..Full Article: Source

Sovereign funds’ spending rebounds in quarter, Institute says

Posted on 17 January 2013 by VRS  |  Email |Print

Sovereign wealth funds’ direct investments picked up in the fourth quarter from a year earlier, signaling a rebound after spending dropped to a six-year low in 2012, the Sovereign Wealth Fund Institute said.
Full-year direct spending, which excludes money outsourced to other funds or asset managers, slumped 36 percent to $57.3 billion, the Las Vegas-based institute said in an e-mailed statement. That’s the lowest since 2006, when direct investments amounted to $14.8 billion, it said………………………………………..Full Article: Source

SWF transactions total more than $57bln in 2012, data shows

Posted on 16 January 2013 by VRS  |  Email |Print

Direct sovereign wealth fund transactions in calendar year 2012 totaled $57.3 billion, representing a 36% drop from the previous year of $89.5 billion, according to data from the Sovereign Wealth Fund Institute. Which sovereign wealth funds are most active? The Government of Singapore Investment Corporation (GIC), Temasek, and other wealth funds that don’t follow index strategy.
“It depends on the philosophy of the fund. You won’t have the Alaska Permanent Fund buying a large stake because if you look at their asset allocation, a lot it is externally managed. And they’ve done quite well,” the Sovereign Wealth Fund Institute’s President Michael Maduell said………………………………………..Full Article: Source

Is Sovereign wealth fund a right?

Posted on 15 January 2013 by VRS  |  Email |Print

The Nigerian government through the ingenuity of the current finance minister Dr. Ngozi Okonjo-Iweala and the approval of President Goodluck Jonathan has just established the National Sovereign Wealth Fund (NSWF) last year.
Financial pundits have already described the establishment of the Nigeria’s National Sovereign Wealth Fund as the most significant economic policy decision to have been taken by President Jonathan since coming into office as an elected President in May 2011. What is sovereign wealth fund and why is this a human right if one may ask?……………………………………….Full Article: Source

Future fund mentioned in February last year is in progress at last

Posted on 14 January 2013 by VRS  |  Email |Print

Former prime minister John Howard built a future fund during the boom period of the early 2000s and fossil fuel-rich Norway has a sovereign wealth fund which quarantines royalties for future generations.
A State Government spokesman said “some internal work” had been conducted on progressing the future fund concept, but it was likely outside experts would soon be called in. “The Government is now looking to commission a firm to provide advice on the establishment of a future fund and how it should sit in Government,” he said………………………………………..Full Article: Source

Canada overdue for new SWFs, says report

Posted on 14 January 2013 by VRS  |  Email |Print

Canada is ready and overdue for new sovereign wealth funds to preserve its resource wealth for later generations, according to new report from the Canadian International Council.
“I think every province that has revenues from non-renewable resources should set one up,” Madelaine Drohan, the report’s author, said. “And the ones that have them should be putting away more money. When the Alberta Heritage Fund was started out in 1976, contributions were supposed to be 30% of oil and gas royalties. Now, if you compare Alberta’s contribution record with that of Norway’s, Alberta would look pretty bad.”……………………………………….Full Article: Source

Alaska’s Permanent Fund dividend: Examining its suitability as a model

Posted on 09 January 2013 by VRS  |  Email |Print

Discussing the Alaska Permanent Fund (APF) and Permanent Fund Dividend (PFD) as a model both for resource policy and for social policy, contributors explore whether other states, nations, or regions would benefit from an Alaskan-style dividend.
Many other jurisdictions could create similar funds and dividends, but most of them under-tax resources, giving resources away to corporations who sell them back to the people. Alaska’s Permanent Fund Dividend looks back at the success of the APF and PFD, and it looks forward (using theory and empirical investigation) to see how the Alaska model can be of use in other places and how the model might be altered and improved………………………………………..Full Article: Source

Polls and stat - Sovereign wealth funds

Posted on 07 January 2013 by VRS  |  Email |Print

In 2012, the world’s top 36 sovereign wealth funds totaled nearly $5 trillion. Oil- and gas-related SWFs comprised the majority of the overall dollar amount, at 57.3%. With 40.5% of the total pie, Asia was the region with the largest share, followed by the Middle East with 35.6%.
The first-ever SWF was the Kuwait Investment Authority, created in 1953 from oil revenues before Kuwait even gained independence from the United Kingdom; that fund is now worth nearly $300 billion. Since 2000, the number of sovereign wealth funds has increased dramatically………………………………………..Full Article: Source

All about sovereign wealth funds

Posted on 19 December 2012 by VRS  |  Email |Print

Aimed at acquiring big-ticket natural resources abroad, the creation of a Sovereign Wealth Fund (SWF) for India has been under the consideration of the finance ministry since 2008. In principle, the proposal to set up a SWF was cleared by a group of ministers on October 13, 2011, after which the matter came up for discussion during a recent meeting in the Prime Minister’s Office.
After detailed deliberations, the government is now of the view that it may be prudent to rework the concept with greater focus on mobilising resources from within, including public sector undertakings, by creating an attractive instrument of investment………………………………………..Full Article: Source

World’s largest sovereign wealth funds

Posted on 07 November 2012 by VRS  |  Email |Print

Norway’s Government Pension Fund has replaced the Abu Dhabi Investment Authority (ADIA) as the largest sovereign wealth fund in the world, according to the latest rankings by the Sovereign Wealth Fund Institute (SWFI).
With assets of $656.2bn, Norway’s fund has taken over the top spot from ADIA, which currently has assets worth $627bn. China’s State Administration of Foreign Exchange (SAFE) remains third on the list with assets estimated to be worth around $567.9bn, while Saudi Arabia’s SAMA Foreign Holdings is in the fourth spot with approximately $532.8bn………………………………………..Full Article: Source

Abu Dhabi loses its world’s biggest SWF crown

Posted on 06 November 2012 by VRS  |  Email |Print

Norway’s Government Pension Fund Global has beaten the emirate to the top spot with assets worth $656.2 billion. The Abu Dhabi Investment Authority (ADIA) is no longer the richest sovereign wealth fund in the world, according to the latest rankings issued by the Sovereign Wealth Fund Institute (SWFI).
With assets of $656.2 billion, the Norwegian Government Pension Fund has overtaken ADIA, which is estimated to have assets worth $627 billion. China’s State Administration of Foreign Exchange (SAFE) continues to remain third on the list with assets worth around $567.9 billion while Saudi Arabia’s also maintained its fourth spot with approximately $532.8 billion………………………………………..Full Article: Source

Norway SWF enjoys gains, spurred by European bond exodus

Posted on 06 November 2012 by VRS  |  Email |Print

Norway’s sovereign-wealth fund, the world’s largest, has become even larger in the third quarter. The fund’s growth was spurred largely by a global equity markets rally as it also lowered its holdings of European bonds. “The result was largely driven by a rally in global stock markets,” said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management (NBIM), which manages the fund. “Stocks gained the most in Europe, where the fund has about half of its shareholdings.”
According to a statement by the fund, equity investments–including allocations to German chemical producer BASF SE and US technology companies Apple Inc. and Google Inc.–returned 6.5% and fixed-income investments returned 2.2%. Investments in real estate returned 2.7%………………………………………..Full Article: Source

Fitch: sovereign wealth fund plan positive for Angola

Posted on 24 October 2012 by VRS  |  Email |Print

Angola’s decision to set up a sovereign wealth fund is positive news, Fitch Ratings says. It reaffirms our view that government policies are reducing the economy’s exposure to movements in the oil price, and laying a foundation for sustainable growth.
This view was reflected in our revision of the Outlook on Angola’s ‘BB-’ rating to Positive from Stable in May. We said that setting up a sovereign wealth fund could contribute to an upgrade if it were coupled with a longer track record of prudent fiscal and monetary policy management………………………………………..Full Article: Source

The 20 sovereign wealth funds that are buying up the world

Posted on 04 October 2012 by VRS  |  Email |Print

Governments with extra money laying around have become major players in the global financial markets through their sovereign wealth funds. These are the gigantic state-owned funds that invest in stocks, bonds, and various other investments like private equity and hedge funds. And these investments are often international.
Barely a day goes by without a major multi-billion dollar fund from one petro-state or another making some splashy acquisition — just this past weekend, Bloomberg’s Josiane Kremer reported Norway’s sovereign wealth fund plans to sink its teeth into U.S. real estate………………………………………..Full Article: Source

The rise of sovereign wealth funds as a new category of investors

Posted on 24 September 2012 by VRS  |  Email |Print

Although the inflow of money from state-controlled investors was initially viewed with scepticism, many now hope that SWFs will help to overcome the slowdown in global M&A activities and more generally contribute to the economic recovery.
For financial service providers, such as investment bank and private equity houses, this development presents opportunities, but it also raises specific governance and compliance challenges, as illustrated by recent controversies surrounding the Libyan Investment Authority………………………………………..Full Article: Source

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What sovereign wealth funds want

Posted on 18 September 2012 by VRS  |  Email |Print

Sovereign wealth funds are ramping up their hedge fund allocations, but successfully navigating the manager selection process requires more than good investment performance, says Sameer Shalaby, president of Paladyne Systems, a Broadridge Company.
Sovereign wealth fund allocations to alternative investments continue to rise. For hedge funds and investment managers with the right profile, the trend brings enormous opportunities, as well as significant challenges………………………………………..Full Article: Source

The changing face of sovereign wealth funds

Posted on 06 September 2012 by VRS  |  Email |Print

Time was, every time a sovereign wealth fund (SWF) acquired an airport, it was alleged to be one small but devious step away from the national treasure. The sometimes protectionist, sometimes xenophobic outcries were silenced for a while: shortage of capital tends to have that effect.
But simultaneous controversies across a number of its investments have increased speculation that the Qatari Investment Authority (QIA) and some of its peers may be adopting an edgier, more aggressive, investment approach…………………………………….Full Article: Source

GCC accounts for 35pct of global sovereign wealth funds

Posted on 03 September 2012 by VRS  |  Email |Print

With 45 per cent of global oil reserves holdings, it’s not a surprise that the GCC retains a major chunk of the SWF pool, and three of its funds feature in the Top 10 SWF List. Yet, Qatar is prominently absent from this coveted ranking, while China is overtly present.
Sovereign wealth funds (SWFs), in simplistic terms, are investment vehicles that deploy a nation’s excess savings into assets around the world with the aim to augment national wealth. Therefore, countries with low debt, capital account surpluses and high oil or currency reserves typically tend to have huge SWFs………………………………………..Full Article: Source

Top 10 sovereign wealth funds

Posted on 03 September 2012 by VRS  |  Email |Print

Fabio ScacciavillaniAmid the Eurozone debt crisis and a global liquidity crunch, sovereign wealth funds (SWFs) have emerged as vital forefront players in the international financial market. With squeezed funding options, investors the world over are keen to tap into the liquid power of SWFs.
According to the SWF Institute, total SWF assets rose 9.6 per cent year-on-year in 2011, from $4.4 trillion in December 2010 to $4.8 trillion in December 2011, while the total global SWF pile is expected to swell to $30 trillion within the next 20 years………………………………………..Full Article: Source

SWFs should design early warning signals to help predict market shocks

Posted on 03 September 2012 by VRS  |  Email |Print

Sovereign wealth funds can take advantage of warning signs such as rising commodity prices to help them reduce the risk in their portfolios in advance of market shocks, according to BNY Mellon. ‘It appears to be counter-intuitive, but a sovereign wealth fund that is sensitive to changes in commodity prices should begin moving into more liquid assets as commodity prices are peaking instead of waiting for them to decline,’ said Rumi Masih, senior investment strategist for BNY Mellon’s Investment Strategy and Solutions Group (ISSG).
Masih made the comments during a roundtable discussion including BNY Mellon investment professionals and a senior advisor to sovereign institutions. The primary purpose of the roundtable was to rethink traditional investment and risk management models to help sovereign wealth funds become better stewards of their national wealth for current and future generations. (Press Release)

Australia: Taskforce calls for more manufacturing-related research, sovereign wealth fund

Posted on 16 August 2012 by VRS  |  Email |Print

The Prime Minister’s Taskforce on Manufacturing has made 41 recommendations to address the major challenges facing Australia’s manufacturing sector, including diverting funds into manufacturing-related research, the investigation of a sovereign wealth fund, business tax cuts, and an increase in infrastructure investment.
The taskforce has argued manufacturing is an important part of the Australian economy, but faces significant challenges including the high Australian dollar, the strength of the resources boom, and increased competition from China………………………………………..Full Article: Source

Sovereign wealth fund investments rose 42pct in 2011

Posted on 19 July 2012 by VRS  |  Email |Print

Sovereign wealth funds made 237 direct investments, valued at $80.9 billion, last year, the Financial Times reported, citing data collected by the Sovereign Investment Lab at Bocconi University in Milan.
A significant part of the investing was by funds in developing countries into developed markets, the FT said, citing the report. Much of the money was put into companies with strong involvement in emerging economies — LVMH Moet Hennessy Louis Vuitton SA (MC) in China and Iberdrola SA (IBE) in Latin America, for example — while little was invested in European manufacturing, suggesting a lack of confidence in the continent’s economy, the newspaper said………………………………………..Full Article: Source

Analysis: Nigeria’s sovereign wealth fund

Posted on 29 June 2012 by VRS  |  Email |Print

The decision of the National Executive Council, yesterday, to approve the management process for the $1 billion Sovereign Wealth Fund (SWF) could not have come at a better time given the current global economic turmoil ravaging many developed and developing countries across the world.
The NEC meeting, which was presided over by Vice-President Namadi Sambo, at the Presidential Villa, Abuja, also approved the increase of the Excess Crude Account to $10 billion from the present $5.3 billion, as part of a deliberate attempt to provide at least a three-month buffer protection for the nation’s economy and insulate it from the vagaries and uncertainties of the global economy, which has been fuelled by the volatility of crude oil prices at the international market………………………………………..Full Article: Source

Managers will lose AUM to sovereign wealth funds - Fund Forum

Posted on 28 June 2012 by VRS  |  Email |Print

Sovereign wealth funds will play a key role in the “disappearance of hundreds of billions of dollars” from the private sector asset management industry over the coming decade, as some of the world’s largest investors become investment managers by buying into the sector, says KPMG.
The business consultancy’s Nicholas Griffin says: “”I fully expect in the next year a SWF will buy a global asset manager, and hundreds of billions [of dollars of AuM] will disappear from the market over the next 10 years, because SWFs will become asset managers, and this is something asset managers will have to respond to.”……………………………………….Full Article: Source

Sovereign funds’ strategic investing

Posted on 27 June 2012 by VRS  |  Email |Print

The Sovereign Investment Lab – which, you have to admit, has a cool name – at Università Commerciale Luigi Bocconi has just released its annual review of sovereign wealth fund direct investment activity. Here’s a few of the interesting takeaways:
SWFs’ direct investments were up significantly in 2011 – there were 15% more transactions worth 42% more than in 2010.The most popular industry for direct investments was financial services, representing 59 of the 237 direct investments last year. (Most of this, however, was due to the needs of domestic banks rather than strategic investments overseas.)……………………………………….Full Article: Source

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Sovereign wealth fund investments rose 42pct in 2011

Posted on 25 June 2012 by VRS  |  Email |Print

Sovereign wealth funds made 237 direct investments, valued at $80.9 billion, last year, the Financial Times reported, citing data collected by the Sovereign Investment Lab at Bocconi University in Milan. A significant part of the investing was by funds in developing countries into developed markets.
Much of the money was put into companies with strong involvement in emerging economies — LVMH Moet Hennessy Louis Vuitton SA (MC) in China and Iberdrola SA (IBE) in Latin America, for example — while little was invested in European manufacturing, suggesting a lack of confidence in the continent’s economy, the newspaper said………………………………………..Full Article: Source

Sovereign funds prominent investors in infrastructure assets

Posted on 22 June 2012 by VRS  |  Email |Print

A report prepared by KFH-Research regarding the performance and status of global infrastructure funds market, mentioned that despite the recent poor performance of subscriptions and money gathering, infrastructure funds are expected to attract more investors and to continue achieving reasonable growth; especially after the growing trend to spend funds on in infrastructure projects and the participation of the private sector in those projects.
In addition, the report noted that infrastructure funds began to recover starting from 2010, where total collected money reached $32 billion, before dropping to $16 billion in 2011………………………………………..Full Article: Source

SWFs to reach $30 trillion in 20 years

Posted on 19 June 2012 by VRS  |  Email |Print

Sovereign wealth funds (SWF) have grown to US$5 trillion but still account for just 6% of world funds under management, according to new research from Rainmaker. The SWF sector has grown 10% pa over the past four years and is on its way to reaching $US30 trillion over the next 20 years provided there are no significant capital draw downs, notes Rainmaker.
Reflecting the dominance of resource revenue in SWF assets, the Middle East makes up 38% of the sector. In Asia SWFs are primarily used to manage fiscal and currency reserve. Nearly two-thirds of Asia’s SWF assets are sourced from China………………………………………..Full Article: Source

An introduction to sovereign wealth funds

Posted on 19 June 2012 by VRS  |  Email |Print

Sovereign wealth funds have attracted a lot of attention in recent years as more countries open funds and invest in big-name companies and assets. Some experts estimate that all sovereign wealth funds combined to hold more than $5 trillion in assets in 2012, a number that is expected to grow relatively quickly.
This has given way to a wide concern over the influence these funds have on the global economy. As such, it is important to understand exactly what sovereign wealth funds are and how they first came about………………………………………..Full Article: Source

An introduction to sovereign wealth funds

Posted on 18 June 2012 by VRS  |  Email |Print

Sovereign wealth funds have attracted a lot of attention in recent years as more countries open funds and invest in big-name companies and assets. Some experts estimate that all sovereign wealth funds combined to hold more than $5 trillion in assets in 2012, a number that is expected to grow relatively quickly.
This has given way to a wide concern over the influence these funds have on the global economy. As such, it is important to understand exactly what sovereign wealth funds are and how they first came about………………………………………..Full Article: Source

The world’s richest sovereign funds

Posted on 15 June 2012 by VRS  |  Email |Print

According to figures from research firm Sovereign Wealth Fund Institute, the UAE capital’s Abu Dhabi Investment Authority is head and shoulders above Norway’s Government Pension Fund – Global with US$611.
The top ten in the rankings is dominated by Asia-based funds, including those from Saudi Arabia, Singapore, Kuwait and China, many of which derive their wealth from oil receipts. Qatar Investment Authority, which has grabbed headlines of late for snapping up luxury assets in the UK and continental Europe, placed 12 with US$100bn………………………………………..Full Article: Source

Worldwide institutional assets dip slightly in 2011

Posted on 12 June 2012 by VRS  |  Email |Print

Worldwide institutional assets among the 688 money managers surveyed by Pensions & Investments dipped 0.31% to $29.16 trillion in 2011, a flat performance after growth of more than 11% a year earlier.
Benjamin Phillips, a partner with Casey, Quirk & Associates LLC in Darien, Conn. said another opportunity for money managers comes from sovereign wealth funds, which are expanding into various asset classes as they continue to grow from capital surpluses in their individual countries. (Overall, sovereign wealth fund assets under management reported by money managers in P&I’s survey were up a mere 0.35% to $898 billion in 2011.)……………………………………….Full Article: Source

UAE central bank data indicate investment jump by sovereign funds

Posted on 30 May 2012 by VRS  |  Email |Print

Sovereign wealth funds and other government entities in the United Arab Emirates greatly increased their overseas investments during 2011 as higher oil prices led to a large rise in the country’s balance of payments surplus, new figures from the U.A.E. central bank indicate.
Capital outflows from U.A.E. public sector entities rose to 95 billion U.A.E. dirhams ($26 billion) in 2011 from AED10 billion in 2010, according to the recently-released central bank annual report for 2011. That was the highest outflow since 2008, when the global financial crisis led to a sharp drop in the U.A.E’s oil revenues………………………………………..Full Article: Source

Wyoming’s Permanent Mineral Trust Fund can’t entirely protect the budget from volatile commodity prices

Posted on 28 May 2012 by VRS  |  Email |Print

The governor gave no mention what-so-ever to a source of funding that was supposed to insulate Wyoming’s budget from the whipsaw of commodities: The Wyoming Permanent Mineral Trust Fund (WPMTF)
Created thirty-eight years ago this month, the WPMTF mandated that a minimum of 1.5 percent of Wyoming severance taxes on gas, oil, coal, and other minerals be placed in a constitutionally protected trust………………………………………..Full Article: Source

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SWFs looking to more alternatives - Opalesque

Posted on 25 May 2012 by VRS  |  Email |Print

The total assets under management of all Sovereign Wealth Funds globally is around $4.6trn and they are increasingly interested in alternative investments, according to discussion recorded at an Opalesque Gulf Round Table.
While most are active in fixed income and equities, which they manage internally and externally through specialized portfolio managers, there is a growing need for diversification and increased yield in the current low interest rate environment………………………………………..Full Article: Source

Recognition of strategic development factors for sovereign funds

Posted on 24 May 2012 by VRS  |  Email |Print

A clear majority of sovereign wealth funds are keenly interested in selecting assets based on risk-adjusted investment returns. The purely financial sovereign fund investor ignores strategic development as a factor.
It is true that some SWFs have a strategic development nature or use strategic development as a possible reason when making a larger than usual investment. Some investors like the Korea Investment Corporation (KIC) will have a separate allocation to these types of investments……………………………………….Full Article: Source

Middle East sovereign wealth funds shift focus to local economies

Posted on 22 May 2012 by VRS  |  Email |Print

Nick TolchardGovernments and sovereign wealth funds (SWFs) in the Middle East are investing less internationally than they have done at any point in the last three years. The third annual Invesco Middle East Asset Management Study analysed the revenues and investment behaviours of major SWFs in the GCC, which account for 35% of global SWF flows, representing $1.6 trillion.
The study found that the international flow of money directly from GCC sovereign governments and from SWFs has changed considerably in light of the political unrest in the region, with large commodity-linked surpluses in these regions increasingly being put to use locally………………………………………..Full Article: Source

Global fight over Gulf wealth funds to intensify: Invesco

Posted on 22 May 2012 by VRS  |  Email |Print

A shift in focus from global to local investments by the big Gulf sovereign wealth funds after the Arab Spring is set to step up competition among Western governments, asset managers and companies hoping for some of their cash, a study by US fund manager Invesco Ltd showed.
“Western governments, including the UK, have approached SWFs (the funds) from the Middle East to help with economic recovery, but many will fight a losing battle,” Nick Tolchard, head of Invesco Middle East told reporters at a conference in Dubai. “There is certainly less money to invest internationally so the stakes are higher.”……………………………………….Full Article: Source

China to fore as global sovereign assets top $5 trillion

Posted on 21 May 2012 by VRS  |  Email |Print

Jai AryaSovereign wealth fund assets have topped $5 trillion globally for the first time, with Chinese entities accounting for one fifth at $1.14 trillion, according to the Sovereign Wealth Fund Institute.
In its latest rankings, the Abu Dhabi Investment Authority leads the pack of 61 sovereign funds with $627 billion in assets, followed by Norway’s Government Pension Fund – Global at $611 billion………………………………………..Full Article: Source

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SWF and the state of Nigeria’s economy

Posted on 21 May 2012 by VRS  |  Email |Print

In a recent Wall Street Journal interview, Nigerian finance minister Ngozi Okonjo-Iweala reviewed Nigerian economic issues, notably, that the anticipated sovereign wealth fund would start operating during the next few months, with U.S. $1 billion from the Excess Crude Account to start. She promised a governing council including representatives from civil society, media, and academics would oversee the account “to ensure that the money is transparently invested.”
In other issues, she emphasized the importance of diversifying the economy to create more jobs. (Nigeria’s economy is growing at the rate of 7.4 percent; she said that most of the growth took place in the non-oil sectors of the economy.)……………………………………….Full Article: Source

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Sovereign wealth funds: The new intersection of money and politics

Posted on 17 May 2012 by VRS  |  Email |Print

Author Christopher Balding having recognised – like many of us – that he knew too little about sovereign wealth funds (SWFs), set about doing something about it. The result is an excellent source of information on SWFs.
Part one, entitled ‘Framework’, begins with the history of SWFs, explaining there are three main types of funds. The first SWFs orginated as ‘stabilisation funds’ that were set up by countries where commodity exports dominated economic activity and governments decided to set aside revenues in the fat years to help fund lean years………………………………………..Full Article: Source

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Sovereign Wealth Fund: India already has one!

Posted on 07 May 2012 by VRS  |  Email |Print

The government is talking about setting up a new sovereign wealth fund or SWF to buy energy assets abroad. This could mean allocating more financial resources from already strained budgetary resources. India already has sovereign wealth.
To activate the fund, India needs political will more than money. Sovereign wealth funds are typically created by countries that have a large budget surplus. Countries like China, Norway, Singapore, Saudi Arabia and other oil rich nations in the Middle-East have large sovereign wealth funds………………………………………..Full Article: Source

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