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Laxman Pai, Opalesque Asia: In the last decade, global sovereign wealth funds (SWFs) have doubled their assets under management (AUM) total to $10.4tn by the end of Q1 2023, said a study.
According to the Sovereign Wealth Funds 2023 report by Preqin, Asia's sovereign wealth funds led the increase in AUM, standing at $4.3tn by the end of Q1 2023. Notably, China Investment Corporation's total AUM of $1.35tn surpassed Norway's Government Pension Fund Global (GPFG) AUM of $1.2tn to become the largest SWF in the world.
The Middle East is home to some of the largest SWFs which hold the second most in AUM of all regions globally, behind Asia. At $3.7tn, they account for 36% of the global sovereign wealth fund AUM.
"As the sheer amount of fresh capital managed by Middle East-based sovereign wealth funds far exceeds the needs and capacity of their domestic capital markets, their appetite for alternative assets has risen. Preqin analysis of Middle East-based SWF data shows that the average allocations to alternatives have doubled year-over-year at the end of 2022, rising from 22% of total assets at the end of 2021 to 44%," the study noted.
Meanwhile, allocations of SWFs to alternative assets as percentages of total allocations increased between 2021 and March 2023 in all asset classes, except for infrastructure. The biggest increase in the current median allocation was in real estate, from 6.5% in 2021 to 8.6%, by the end of Q1 2023.
Percentage allocations are also l...................... To view our full article Click here
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