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Russia’s Vulnerable Side Is at Fore in Putin’s Call-In Show

Posted on 15 April 2016 by VRS  |  Email |Print

Russia President Vladimir V. Putin said there was enough money in the two main sovereign wealth funds and other reserves to tide Russia over for the next four years.
That is a far rosier picture than outside analysts have predicted. The World Bank, for example, estimated this month that the economy would contract by 1.9 percent this year and said that about 20 million Russians were now living below the poverty line. There have also been widespread predictions that the main sovereign wealth fund, the Reserve Fund, could run dry by next year………………………………………..Full Article: Source

How the Qatar Investment Authority’s economic strategy affects the Western world?

Posted on 12 April 2016 by VRS  |  Email |Print

As reported in Bloomberg news and other venues, Qatar’s government is looking to get involved in the U.S. in a big way. The country’s sovereign wealth fund, the Qatar Investment Authority, has opened a New York office and is aggressively looking to acquire U.S. assets with $35 billion. At the same time, Qatar and its related investors are also spending money in other places around the world, including China and the European Union.
In the midst of all this, many are asking how these relationships will affect Western nations, which traditionally have pushed for democracy around the world. Will EU nations and the U.S. still be as vocal and up front about human rights problems when they are receiving so much money from Gulf states like Qatar?……………………………………….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

The Gulf’s sovereign dilemma

Posted on 11 April 2016 by VRS  |  Email |Print

To withdraw or not to withdraw?” asks American University of Sharjah professor Dr Jorg Bley in a column for Arabian Business (see page 34) about the present state of Gulf sovereign wealth funds (SWFs). The multibillion-dollar funds have enjoyed strong growth in recent years but analysts now warn that growth is slowing as flat oil prices and low liquidity force governments to break into their investment vehicles.
Across the Gulf, evidence abounds of governments drawing down on SWF assets to plug budget deficits or otherwise stabilise national economies. The biggest oil-producing nations are under particular stress while commodity prices remain low — the International Monetary Fund (IMF) estimated that Gulf countries together lost more than $300bn of hydrocarbon revenues last year………………………………………..Full Article: Source

Sovereign Wealth And Pension Funds Eye Bigger Bet On Asia And Alternatives

Posted on 08 April 2016 by VRS  |  Email |Print

Faced with a challenging investment environment, central banks, sovereign wealth funds (SWFs) and government pensions are adapting their investment models to be more agile, according to a new research report by State Street Corporation.
After surveying over 100 central banks, sovereign wealth funds and government pensions globally, State Street says these official institutions are diversifying their portfolios and looking at new asset classes and markets. Despite the weakened outlook for growth in China, Asia remains the most attractive region for investment with 89% of Asia-Pacific institutions and 63% of institutions from other regions planning to increase their investments there………………………………………..Full Article: Source

Qatar Investment Authority coming to America, along with concerns about foreign diplomacy

Posted on 07 April 2016 by VRS  |  Email |Print

Among the sovereign wealth funds that allow nations to make foreign investments in their national interests, the Qatar Investment Authority (QIA), representing the oil-rich Gulf state, is one of the wealthiest. A Carnegie Endowment study showed the QIA amassed assets of $70 billion as of 2010.
This year, the QIA is poised to put $35 million into a set of U.S. investments, including the buyout of a division of American Express and other key investments. The QIA also plans to set up a new office in New York. Qatar officials says they just want to be closer to partners, and they highlight the creation of U.S. jobs………………………………………..Full Article: Source

Norway rejects proposal of investing wealth fund in infrastructure

Posted on 06 April 2016 by VRS  |  Email |Print

Norway’s $850-billion sovereign wealth fund, the world’s largest, should not be allowed to invest in unlisted infrastructure projects, the government said on Tuesday in its annual white paper. The central bank, which manages the fund, had recommended that it should be allowed to invest in infrastructure.
The fund currently invests about 60 percent of its value in stocks, 35 percent in bonds and up to five percent in real estate, all outside Norway. In the future, allocations in real estate could rise to 7 percent, the government said………………………………………..Full Article: Source

Reforms crucial to keeping GCC ratings high: Asiya Investments

Posted on 06 April 2016 by VRS  |  Email |Print

As an example, Kuwait has enough reserves and sovereign wealth fund assets to finance 13.4 years of imports, while Bahrain could only finance over a year. The evolution of oil prices and the capability of institutions to diversify income sources will be the main factors that ratings agencies will take into account in their grading decisions.
A cross-sectional comparison across 37 countries shows that credit ratings explain about 37.5% of 10-year sovereign bonds yield. On average, the sovereign bond yield of any country is 0.4 percentage points higher than the one of a country with an immediately superior credit score. The intuition behind it is that a downgrade will increase the yield in the bond………………………………………..Full Article: Source

Korean public funds hesitant to outsource investing to SWF

Posted on 05 April 2016 by VRS  |  Email |Print

Korea Investment Corp. is looking to leverage its expertise as a sovereign wealth fund invested entirely offshore on behalf of other local pension and public funds in the country, but its target audience might not be ready to jump at the offer.
At his inaugural press conference on Feb. 18, Eun Sung-Soo, KIC’s newly installed CEO, said winning mandates from local pension and public funds is part of KIC’s long-term strategy to achieve economies of scale for all involved, noted a Seoul-based KIC spokeswoman………………………………………..Full Article: Source

Petro-dollar crunch hits GCC sovereign wealth funds

Posted on 05 April 2016 by VRS  |  Email |Print

The Gulf Cooperation Council (GCC) countries are facing a major financial crisis if they fail to make changes to their own structures or economies. A continued period of low prices for oil and natural gas will have a detrimental effect on the overall stability of the regional economies. After years of high oil prices, generating vast amounts of revenues being put into sovereign wealth funds (SWFs), the market is oversupplied.
Still, gross domestic growth overall in the region is positive, and inflation remains under control. Total growth of the GGC’s GDP, according to the IMF, is set to decrease to 2.7% in 2016, in comparison to 3.2% in 2015 and 3.4% in 2014………………………………………..Full Article: Source

Sovereign Wealth Descends On China

Posted on 30 March 2016 by VRS  |  Email |Print

Despite economic headwinds, such as a potential for massive job losses in China, foreign public funds continue to want to access thematic institutional investments in Asia’s largest market. Public institutional investors such as sovereign funds have directly invested over US$ 42.97 billion in China (including Hong Kong) from 2013 to the end of 2015, according to SWFI’s Sovereign Wealth Fund Transaction Database.
Sovereign investors such as Singapore’s GIC Private Limited, China Investment Corporation (CIC), Qatar Investment Authority (QIA) and the Kuwait Investment Authority (KIA) actively pursued large-scale opportunities in Chinese real estate and company investments………………………………………..Full Article: Source

Norway’s oil fund increases bet on property markets

Posted on 29 March 2016 by VRS  |  Email |Print

Norwegian sovereign wealth fund aims to invest $41.5bn in global real estate. Norway’s $830bn oil fund plans to double the size of its property team as the world’s largest sovereign wealth fund seeks to improve performance after posting its worst annual return since 2011.
The oil fund has set itself a target of investing $41.5bn in global property markets. If met, the fund would pour another $16bn into real estate this year. To meet that target, the fund plans to increase the number of staff in its property operation from 104 to 200 by 2017, according to its latest annual report………………………………………..Full Article: Source

Lower oil tests sovereign wealth funds

Posted on 23 March 2016 by VRS  |  Email |Print

Bader Al Sa’ad, the head of the Kuwait Investment Authority, isn’t spending much time these days assessing new investments. Instead he is advising his government as it moves to establish a debt management office. Circumstances have changed in the Gulf, bringing in their wake a host of ripple effects. A while ago, the biggest headache for the sovereign wealth funds of the Middle East was finding safe but profitable homes for their portion of swelling oil revenues.
Now, many are fortunate if they do not have to liquidate holdings at the request of their cash strapped governments. Kuwait is among the best managed of the sovereign wealth funds in the Gulf which means it is under less pressure to sell, rather it is simply putting out less new money………………………………………..Full Article: Source

Norwegian National Oil Fund: A sovereign wealth fund to emulate

Posted on 22 March 2016 by VRS  |  Email |Print

Pragmatic economic management of Norway’s oil wealth has ensured that future generations will benefit from the wisdom and incorruptibility of their ancestors. Stavanger is perhaps the epitome of the economic transformation of Norway.
A sleepy fishing town, Stavanger once had good times, a decades-long boom in herring fishing, which ended suddenly with plunging catches after 1870. Like the rest of Norway, the town collapsed, with a huge fleet of wooden sailing ships and an agricultural economy. And in comparison to its industrialising neighbours, Norway was being left behind………………………………………..Full Article: Source

Is There Growing Politicization Of Norway’s Sovereign Fund?

Posted on 18 March 2016 by VRS  |  Email |Print

Norway has been able to amass tremendous financial wealth from petroleum revenue over the past fifteen years. The wealth fund commands attention from policymakers, asset managers and the citizens of Norway. Thus, Norway’s Government Pension Fund Global (GPFG), the ex-Norway part of oil-derived assets, wields significant influence when it comes to corporate governance and investment policy.
For example, allocation to renewable and environmental strategies gained further traction in 2009, amid pressure from Norwegian politicians. During that period, Norway’s sovereign fund awarded mandates to a number of external managers in environmental-related mandates. By 2014, Norges Bank Investment Management (NBIM) established their first portfolio dedicated to green bonds, in which the reference portfolio is based on a sub-segment of the Barclays MSCI Green Bond Indices………………………………………..Full Article: Source

Fine tuning and tweaks keep the world’s biggest ethical investor in clover

Posted on 14 March 2016 by VRS  |  Email |Print

The ethics watchdog for Norway’s €765bn wealth fund will focus this year on identifying corruption in telecoms, arms and energy companies and expects to recommend that an increasing number of firms across all sectors be barred from investment.
By the end of 2016, the fund, which invests income from Norway’s oil and gas production, could add companies to its blacklist for emitting too much climate-changing gas, said the chairman of its independent ethics panel, Johan H Andresen. The ethics panel will also look into allegations of human rights abuses in Qatar’s building sector, Malaysia’s electronics goods industry and textile factories in some Asian countries………………………………………..Full Article: Source

John Brumby, Paul Howes split over super debate

Posted on 14 March 2016 by VRS  |  Email |Print

The debate over the purpose of superannuation launched by the Turnbull government has split senior Labor figures over whether investors’ freedoms or nation building should be paramount. Former Victorian Labor premier John Brumby said Australians should not be given too much choice over their superannuation fund because money ought to be available for nation building.
“The reality is that in super, too much choice can be a bad thing because for super funds to invest in long-term infrastructure like roads and ports and even high-speed rail, you need secure, long-term flows of savings,” he told The Australian Financial Review………………………………………..Full Article: Source

Norway Wealth Fund Isn’t Joining Global Stock Selloff, CEO Says

Posted on 11 March 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund, the world’s biggest, hasn’t been part of a global selloff in stocks this quarter, according to its chief executive officer, Yngve Slyngstad. “We have not been participating in the selling, and we don’t foresee” that a change of strategy will be necessary, Slyngstad said at a presentation of the fund’s 2015 results on Wednesday in Oslo.
The comments follow evidence that wealth funds across the Middle East and central Asia have sold assets to plug deficits amid plunging oil prices. Speculation that petrodollar-stocked wealth funds were exiting assets has fed into market turmoil as stocks sank this quarter. The MSCI World Index is down more than 4 percent since the end of December………………………………………..Full Article: Source

SWFs increasingly looking to ETFs for their core portfolio

Posted on 11 March 2016 by VRS  |  Email |Print

Being intergenerational funds and holding no liabilities make sovereign wealth funds (SWFs) the ultimate in long-term investors. With the luxury of time they have the ability to fully benefit from the illiquidity premium historically inherent in many real, actively managed assets.
However, a sea of change sits on the horizon with SWFs increasingly considering ETFs for their core portfolio exposure. Three business drivers lie behind this trend, including insourcing investment capabilities; an SWF equity market discount, and lower for longer oil prices………………………………………..Full Article: Source

Citi plans to focus on clients like SWFs

Posted on 11 March 2016 by VRS  |  Email |Print

Senior investment bankers Zubaid Ahmad and Brad Coleman will be leading a new group at Citigroup Inc focused on better serving clients that are private equity firms, hedge funds and sovereign wealth funds, according to a memo seen by Reuters on Wednesday.
The new Global Asset Management Group will help boost the investment banking coverage of these alternative asset managers, which will also include pension funds and some family offices. A Citi spokesman confirmed the contents of the memo………………………………………..Full Article: Source

Norway Wealth Fund Keeps Buying as Struggling Petro-States Sell

Posted on 10 March 2016 by VRS  |  Email |Print

Norway will remain a bulwark against global stock declines as its sovereign wealth fund, the world’s biggest, proves to be an odd-ball among oil-built investment vehicles. “There’s been a lot of writing about oil-based sovereign wealth funds selling assets. Well, as a matter of fact, we have actually been net buying assets this year,” Yngve Slyngstad, CEO of the $830 billion fund, said in an interview in Oslo.
And the buying probably won’t stop soon. Unlike wealth funds in the Middle East and central Asia, Norway doesn’t foresee a need to sell assets, even as the government starts withdrawing money from its massive piggy bank to plug budget holes exacerbated by collapsing crude prices………………………………………..Full Article: Source

Rare Glimpse Into Norwegian Fund Shows Shift From Large Stakes

Posted on 10 March 2016 by VRS  |  Email |Print

Disclosures by Norway’s $877 billion oil fund offer an unusually detailed view of its workings. Norway’s $877 billion sovereign-wealth fund, the world’s largest, said on Wednesday that it held fewer large equity stakes at the end of 2015 than a year earlier, due to a gradual shift away from Europe and a transfer of equity assets into its real-estate portfolio.
Norges Bank Investment Management, or NBIM, which manages the fund, said it held stakes exceeding 5% in 29 companies at the end of 2015, down from 57 companies a year earlier. It held stakes exceeding 2% in 1,074 companies, down from 1,205 companies a year earlier………………………………………..Full Article: Source

Guyana SWF: Gov’t must get cracking on anti-corruption plans

Posted on 08 March 2016 by VRS  |  Email |Print

Since Guyana will in the future be an oil producing country with a Sovereign Wealth Fund, former Speaker of the National Assembly Ralph Ramkarran on Saturday urged the APNU+AFC government to swiftly establish anti-corruption mechanisms to prevent dishonest dealings.
“In a few short years we will be joining the club of oil producers. If we allow Guyana to enter that club with an ingrained ethic of corruption still festering, no amount of posturing about the securing and protecting of oil profits in a Sovereign Wealth Fund will prevent the skimming off from the top, before the funds reach the Sovereign Wealth Fund, of a significant portion by corrupt deeds and transactions,” Ramkarran warned………………………………………..Full Article: Source

Is Norway’s Sovereign Wealth Fund at Risk? (Video)

Posted on 04 March 2016 by VRS  |  Email |Print

Kari Due-Andresen, Handelsbanken chief economist, discusses Norway’s fund withdrawals with Bloomberg’s Alix Steel and Scarlet Fu on “What’d You Miss?”.………………………………………Full Article: Source

Sovereign Wealth Funds: the Struggle for Accountability

Posted on 04 March 2016 by VRS  |  Email |Print

Sovereign wealth funds have become some of the largest and most visible investors in international capital markets. Due to public concerns about their virtually unchecked power, a global code of practice (referred to as Santiago Principles or Generally Accepted Principles and Practices - GAPP) was instituted to improve their governance.
A new study takes a look behind the scenes to reveal the processes and actors that drove the creation of this new governance regime, which intends to make sovereign funds more accountable………………………………………..Full Article: Source

Asia: Sovereign funds adapt to new environment

Posted on 03 March 2016 by VRS  |  Email |Print

If the smartest money invests for the longest term, then recent evidence suggests that its managers got ahead of the market downturns that have blighted the start of the year. Sovereign wealth funds that have reported their year-end allocations for 2015 – that is, not many of them yet – show a clear reduction of risk appetite.
Australia’s Future Fund, with A$118.4 billion ($85.3 billion) under management at the end of 2015, made big reductions in stocks last year. By December 31 only 6.5% was in Australian equities, compared with 8.8% a year earlier; only 17.2% was in global developed market equities, compared with 20.9%; and 7.3% in emerging market equities, compared to 9.4% a year earlier……………………………………….Full Article: Source

Oil Has Sovereign Wealth Funds Hitting Sell Button

Posted on 02 March 2016 by VRS  |  Email |Print

The last thing Libya needs is low oil prices. Racked by a civil war that’s ground the economy to a halt, the nation, which holds the largest proven crude reserves in Africa, is burning through its cash reserves. The longer the conflict lasts, the more Omar (Masinessa) Khattaly, head of the Libyan Investment Authority’s $5 billion real estate and hotel portfolio, fears for the future of the $67 billion sovereign wealth fund.
“I’m afraid if the situation remains at the level that it is at this point, I think we might see some trophy buildings out for sale in the market in the future,” Khattaly said. “But I think LIA will not be the only sovereign wealth fund that will have to take that route. I think many sovereign wealth funds out there will have to do the same.”……………………………………….Full Article: Source

How Oil Is Burning a Hole in Asia

Posted on 01 March 2016 by VRS  |  Email |Print

As the price of oil drops, so do the foreign-exchange reserves of those nation’s central banks. That’s an indication that sovereign wealth funds built with petrodollars aren’t investing much lately. In fact, they’re selling. Such sovereign wealth funds are, naturally, key buyers of sukuk, or Islamic bonds.
After decades of buying, sovereign wealth funds globally hold more than $3 trillion of stocks. According to a report released earlier this month by the Las Vegas-based Sovereign Wealth Fund Institute, some $404.3 billion of that may be withdrawn this year if crude stays between $30 to $40 a barrel………………………………………..Full Article: Source

Sovereign Wealth Funds (SWF) are ready to get out of Dodge

Posted on 23 February 2016 by VRS  |  Email |Print

According to a report from the Sovereign Wealth Fund Institute (SW FI), SWFs - investors with more than $30 trillion at work around the world who invest on behalf of governments - aren’t going to keep all their money in this choppy market for much longer.
From the report: If oil prices remain in the US$ 30 to US$ 40 per barrel range, we predict a withdrawal of US$ 404.3 billion withdrawal from global listed equities, about twice the amount that left in 2015. We take into effect past behavior, government structure, the need for capital to lessen fiscal gaps and reporting lag times. Part of the estimate includes a prediction on how well assets will perform in 2016………………………………………..Full Article: Source

Abu Dhabi fund eyes RET projects

Posted on 17 February 2016 by VRS  |  Email |Print

An investment arm of the Abu Dhabi government is to examine taking a stake in renewable energy projects in Australia in a move that could help the sector regain ­momentum after the political ­impasse over changes to the Renewable Energy Target.
Environment Minister Greg Hunt met Masdar Capital chairman sultan Ahmed Al Jaber and chief executive Ahmed Belhoul during a trip to the Middle East last week, and they expressed interest in coming to Australia to examine renewable energy opportunities………………………………………..Full Article: Source

Oil-producing nations retreat from Korean, Japanese stocks

Posted on 17 February 2016 by VRS  |  Email |Print

Struggling to fill the hole in revenues left by the plunge in the oil price, investors from the world’s major oil producing countries were among the biggest sellers of South Korean stocks over the past year. Analysts say sovereign wealth funds are likely to be among the bigger sellers of Korean stocks and suspect the same investors are behind outflows seen in Japan in January.
“Oil money is flowing out as oil producing countries’ deteriorating trade balances due to the low oil prices worsen their fiscal balances. They cannot quickly cut fiscal spending,” said Kim Jae Eun, Standard Chartered Bank’s economist for investment advisory and strategy, in Seoul………………………………………..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

Investment pact to attract UAE’s sovereign wealth funds to India

Posted on 12 February 2016 by VRS  |  Email |Print

India and the United Arab Emirates (UAE) on Thursday signed a clutch of pacts to boost their strategic and economic ties, including one on concluding a mechanism to allow UAE institutional investors to put money into India’s cash-starved infrastructure and another for rupee-dirham currency swaps.
The investment pact is aimed at attracting the UAE’s sovereign wealth funds into the infrastructure sector. The UAE controls the second largest sovereign wealth fund in the world—the Abu Dhabi Investment Authority with around $800 billion under its management………………………………………..Full Article: Source

Oil prices & the impact on Sovereign Wealth Funds Libya as a case

Posted on 12 February 2016 by VRS  |  Email |Print

The drop in oil prices in the last 12 months has taken markets and investors by surprise. State institutions such as Sovereign Wealth Funds (SWF) have been affected and state budgets have suffered. SWF will grow slowly and in many cases will see some of their assets declining in value or being liquidated to help with government budget deficits. State foreign exchange reserves will be affected as well.
There are over 77 SWFs in existence with total assets of over $7.1 trillion dollars, of which $4 trillion are oil and gas related funds. By the end of 2015 more than 56 percent of the assets of SWFs originated from the sale of oil and gas related products. These funds account for anywhere from 5-10% of total money invested in global markets………………………………………..Full Article: Source

Are Sovereign Wealth Funds to Blame for Bank Stock Drop? (Video)

Posted on 12 February 2016 by VRS  |  Email |Print

Gabriela Santos, JPMorgan Asset Management strategist, discusses the selloff in U.S. stocks with Bloomberg’s Alix Steel, Joe Weisenthal and Scarlet Fu on “What’d You Miss?”.………………………………………Full Article: Source

Sovereign funds’ selling could hit $700 billion of European stocks

Posted on 11 February 2016 by VRS  |  Email |Print

Up to $700 billion (481.70 billion pounds) of European stocks, including major banks, could be in the firing line as the slump in oil prompts some producer countries’ sovereign wealth funds to offload investments.
Fund managers and investors say recent sharp selloffs in global markets and especially European stocks may have been exacerbated by national rainy-day funds selling parts of their equity portfolios to ease squeezed public finances. That might also help explain why European bank stocks have lost nearly a quarter of their value since the start of the year, a $240 billion wipe-out more brutal than at the start of the financial crisis in 2008………………………………………..Full Article: Source

Sovereign wealth funds playing a leading role

Posted on 10 February 2016 by VRS  |  Email |Print

The Omani fund has played an important role with the Oman investment arm, Oman Oil, taking equity in the energy sector and other industries to diversify our economy. A SWF is an entity or fund that is state owned and can be considered as a source of surplus cash received from energy receipts, balance of payments, governmental payments, fiscal surplus, foreign currency operations and proceeds of privatisation.
Our key focus today is the rise SWF from energy receipts and this holds true to energy resourced countries. Oil and gas has been instrumental in increasing the SWF purse and will be discussed later on. In terms of classification, SWF can be a stabilisation fund, saving / future generation fund, pension reserve fund and strategic development fund………………………………………..Full Article: Source

Norway’s sovereign wealth fund asked miners to consider coal demergers

Posted on 08 February 2016 by VRS  |  Email |Print

Norway’s influential sovereign wealth fund asked mining companies in its investment sphere to consider spinning out their coal assets in 2015.The fund, which is a top five shareholder in BHP Billiton, made the request just months before BHP spun out South32.
The coal push was revealed in the fund’s 2015 annual report. It also shows the fund divested from 73 companies in 2015 for ethical and governance reasons. The fund has made headlines in recent years for its increasingly strict stance against investing in fossil fuels………………………………………..Full Article: Source

Falling commodity prices should not weaken SWF drive

Posted on 04 February 2016 by VRS  |  Email |Print

The continuous fall in oil and commodity prices has given shivers to most of Africa’s policy makers in terms of revenue collections and this has led many to question the need of a Sovereign Wealth Funds (SWF) when revenues are low.
The SWF case has long been anchored on the fact that African countries in the past decade had been receiving significant income flows from commodities and oil exports making the case for them to create a fund to save this surplus for future crisis situations, but since 2014 the oil and commodity prices have been falling which has reversed the gains witnessed earlier on………………………………………..Full Article: Source

Abu Dhabi to shift $27B out of sovereign wealth fund

Posted on 04 February 2016 by VRS  |  Email |Print

Abu Dhabi, facing huge budget deficits, will likely transfer as much as $27 billion out of its sovereign wealth fund – the Abu Dhabi Investment Authority – into the government treasury, according to a report by Fitch Ratings.
ADIA, the largest sovereign wealth fund in the Middle East, has over $850 million in New York City real estate holdings. The emirate has taken major hits to its government revenues as oil prices have tanked over the past year, along with other major oil producers such as Russia and Saudi Arabia………………………………………..Full Article: Source

Will There Be Another Sovereign Wealth Selloff Wave?

Posted on 03 February 2016 by VRS  |  Email |Print

Macroeconomists, asset manager CEOs, market pundits and media commentators expressed concern about wealth funds and their current impact on global equity markets. However, the selling by commodity-based funds, specifically in the wealthy GCC region, started in the midst of 2015. Funds such as Mubadala Development Co and the Qatar Investment Authority (QIA) were looking to sell off non-core assets to shore up cash and improve profits.
For example, the QIA put Miramax on the selling block, while lowering its equity ownership in French builder Vinci. It is fair to say not all commodity-based sovereign funds are in sell mode. Countries with commodity-based wealth funds which demonstrate well-diversified economies, or have smaller populations, may be in a better fiscal position in a world with low oil prices………………………………………..Full Article: Source

Sovereign wealth funds drive turbulent trading

Posted on 02 February 2016 by VRS  |  Email |Print

Asset managers have blamed outflows from sovereign wealth funds for one of the worst starts to the year for markets. The collapse in the price of oil resulted in state-backed investment vehicles becoming “forced sellers”. The year began with a sharp drop in equity markets. UK and US stocks fell almost 10 per cent in the first few weeks of 2016 and emerging markets were hit even harder.
Philippe Ferreira, a director at Lyxor Asset Management, the €116bn fund house, said sovereign wealth funds have been driving the turbulent trading conditions. “We know the sovereign wealth funds are under pressure to sell and that is contributing to the market pressure we are seeing,” he said. “Sovereign wealth funds have become forced sellers,” added Guy Monson, chief investment officer of Sarasin & Partners, a UK boutique investment manager………………………………………..Full Article: Source

Sovereign wealth funds sell stocks

Posted on 02 February 2016 by VRS  |  Email |Print

With tax revenues plunging in oil-producing countries, some asset managers are putting part of the blame for January’s stock selloff at the foot of sovereign wealth funds - forced to sell equities to make up government budget shortfalls.
The FT reports the Saudi Arabian Monetary Agency as pulling $70B from external managers last year, and Kazakhstan as also making asset sales. SWFs, of course, own plenty of property and P-E, but when money is needed quickly it’s stocks that are easiest to unload………………………………………..Full Article: Source

Norway’s wealth fund may invest in emerging economies

Posted on 01 February 2016 by VRS  |  Email |Print

Norway’s lawmakers are expected to grant the country’s $800 billion sovereign wealth fund a broader investment brief to better spread risk, the leader of the parliamentary finance committee said.
The central bank, which manages the fund, last month recommended it should be allowed to invest in unlisted infrastructure projects and put a higher share of its assets into real estate, changes representing the biggest shift in strategy since it was permitted to buy property in 2010………………………………………..Full Article: Source

Arabian Gulf funds find Europe’s finest hotels still attractive as ever

Posted on 01 February 2016 by VRS  |  Email |Print

Despite the tumbling prices of oil, sovereign wealth funds from the UAE, Qatar and Kuwait are continuing to pour billions of dirhams’ worth of investment into some of Europe’s finest ­hotels. About US$5.2 billion of cash from Middle East investors has found its way into hotels in the United Kingdom and mainland Europe over the last 24 months, according to the property broker CBRE.
Last year alone, Middle East buyers spent three times as much on European hotels as they did at the height of the previous global property boom in 2007. The big-ticket buying spree from GCC investors includes three of London’s highest-profile hotels – Claridge’s, the Berkeley and the Connaught, which were bought in April last year by part of Qatar’s sovereign wealth fund………………………………………..Full Article: Source

GCC Economic Council for managing sovereign funds

Posted on 01 February 2016 by VRS  |  Email |Print

Many questions have been raised about the proper way to overcome the current economic crisis caused by the oil price decline in the global market. Each country in the GCC is presenting a solution that appears suitable, amid the absence of a unified strategy to help the organization as a whole, not only to surpass the current period but also to ensure not to get trapped in it in the future.
The GCC countries are known to own vast wealth in the form of sovereign funds — estimated at 45 percent of the total sovereign fund in the world, with a capital of about $2 trillion. Each of these countries works individually, so it is easy to entice one side and blackmail the other. This has been the practice for decades………………………………………..Full Article: Source

Oil prices & the impact on Sovereign Wealth Funds - Libya as a case

Posted on 01 February 2016 by VRS  |  Email |Print

The drop in oil prices in the last 12 months has taken markets and investors by surprise. State institutions such as Sovereign Wealth Funds (SWF) have been affected and state budgets have suffered. SWF will grow slowly and in many cases will see some of their assets declining in value or being liquidated to help with government budget deficits. State foreign exchange reserves will be affected as well.
There are over 77 SWF’s in existence with total assets of over $7.1 Trillion dollars, of which $4 trillion are oil and gas related funds. By the end of 2015 more than 56 percent of the assets of SWFs originated from the sale of oil and gas related products. These funds account for anywhere from 5-10% of total money invested in global markets………………………………………..Full Article: Source

Norway’s oil wealth is an enviable nest egg in hard times

Posted on 29 January 2016 by VRS  |  Email |Print

When times get tough, it never hurts to have €700bn stashed away like Norway does in the world’s biggest sovereign wealth fund, to cushion the blow of plunging oil prices. Oslo has prudently tucked away most of its oil money since the 1990s in order to be able to finance its generous welfare state indefinitely.
Invested in stocks, bonds and real estate, the fund is now worth about 6.96-trillion kroner (€734bn), equivalent to about six annual budgets or more than €137,000 for each of the country’s 5.2-million inhabitants………………………………………..Full Article: Source

Sovereign Funds Vs. Asset Managers: The Big Picture

Posted on 29 January 2016 by VRS  |  Email |Print

A number of asset managers who focus on institutional investors such as commodity-based sovereign wealth funds have been ravaged with redemptions. The rapid descent of oil prices flummoxed wealth fund chiefs. In response to the oil glut, the money management spigot for investment managers running listed equity strategies has slowed.
Furthermore, Middle Eastern sovereign funds have been dumping some hedge funds (some shuttered operations), while Canadian asset giants shift more focus toward private credit, real estate and infrastructure investments. However, for some cash-rich sovereign wealth funds like the Abu Dhabi Investment Authority (ADIA), the sustained low price of oil has a negligible effect on their real estate investment activities………………………………………..Full Article: Source

‘Much to worry about’, says Future Fund boss

Posted on 28 January 2016 by VRS  |  Email |Print

Addressing media at a portfolio update to 31 December 2015, Future Fund chairman Peter Costello said returns are likely to be harder to come by in the immediate future. The Future Fund, which like all sovereign wealth funds around the world pays no tax, returned a healthy 8.4 per cent throughout 2015.
However, the return for the last six months of the year was only 1.0 per cent. Mr Costello put the difficulties facing the Future Fund down to the phenomenon of central banks “pumping lots of money at very low interest rates” into the global economy………………………………………..Full Article: Source

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