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Laxman Pai, Opalesque Asia: 2021 broke records for the number of direct investments made by sovereign wealth funds (SWFs), jumping from 316 in 2020 to 429 in 2021, a 50% increase year-on-year, and a 60% increase in the average number of deals in any of the previous five years, said a study.
According to the annual review by the International Forum of Sovereign Wealth Funds (IFSWF), the value of those deals also climbed in 2021, reaching $71.6 billion, up from $67.8 billion in 2020. In 2021, sovereign wealth funds not only invested in digital technologies but also put more capital into hard assets.
Sovereign wealth funds have been increasing allocations to unlisted assets for the best part of a decade. But now, rather than distinguishing between listed and unlisted assets, sovereign wealth funds seek to generate real durable value by backing less mature companies instead of recycling existing wealth and boosting returns by occasionally making contrarian bets in times of market dislocation.
Meanwhile, investments in global technology and consumer goods accounted for a third of the value of direct investments - $25 billion.
The study revealed that infrastructure assets play an important role in diversifying sovereign wealth fund portfolios. COVID-19 has had a range of effects on infrastructure. For some sub-sectors, such as passenger-linked transport assets, 2020 and 2021 were difficult years.
For others, such as digital infrastructure and renewables, they we...................... To view our full article Click here
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