Opalesque Industry Update - New research in the 2014 Preqin
Sovereign Wealth Fund
Review reveals that sovereign funds globally have
added over $750bn to their total assets under management
over the last year, from $4.62tn in 2012 to $5.38tn
in 2013. This growth, which is the largest annual increase in total sovereign wealth fund assets since Preqin
began tracking this information, can be accounted for by both the number of new
sovereign wealth funds
formed over the last few years, as well as capital injected into existing sovereign wealth funds.|
Interestingly, Asia-based sovereign wealth funds have
shown some of the largest growth in assets under
management, with the assets of these sovereign wealth
funds growing, on average, by 19% since 2012. This is
in comparison to the average 6% growth in assets
under management exhibited by Middle Eastern sovereign
wealth funds. In fact, Asia-based sovereign wealth funds account for a significant 47% of global aggregate
sovereign wealth fund assets, despite only representing 22% of sovereign wealth funds globally by number.
Other Key Facts:
15 new sovereign wealth funds have been formed since 2008, with eight of these being formed in the
past two years alone.
63% of sovereign wealth funds have seen an increase in their assets under management since 2012.
The largest sovereign wealth fund globally is Government Pension Fund – Global, based in Norway,
with $775.2bn in assets under management; this is an increase of $185bn since 2012.
The proportion of sovereign wealth funds investing in private equity and hedge funds has decreased
over the past year, from 57% and 38% investing in
private equity and hedge funds respectively in 2012
to 45% and 31% respectively in 2013. Some of this decline can be accounted for by the growth in the
number of new sovereign wealth funds being established, as these newer sovereign wealth funds
typically will not allocate to alternative investments for a few years as they
build up their investment
teams and accumulate assets.
However, appetite for real estate and infrastructure has remained steady, with 54% of sovereign wealth
funds investing in real estate in both 2012 and 2013, and the proportion investing in infrastructure rising
slightly from 56% in 2012 to 57% in 2013.
72% of sovereign wealth funds investing in private equity have a preference for venture capital
investments, a significant increase on the 59%
which cited the same preference in 2012.
MENA, North America, and Asia-based sovereign wealth funds show the greatest appetite for private
real estate investments; 81%, 80% and 75% of sovereign wealth funds respectively in each region
invest in the asset class.