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Sovereign Wealth Funds Briefing - Categorized | Performance, Research

‘Politicised’ SWFs earn lower returns

Posted on 30 December 2015

Sovereign wealth funds that are “highly politicised” earn lower returns on their stock-market investments than more independent peers, according to new academic research. An analysis of more than 1,000 sovereign wealth fund investments in publicly traded companies found that shares in those companies rose less following a purchase by a sovereign wealth fund compared with almost 6,000 comparable stock purchases by private investors.
The so-called SWF discount was worse when funds with strict government oversight bought shares. There was no discount when Norway’s independently managed sovereign wealth fund bought shares, according to Veljko Fotak of the University at Buffalo, who wrote the report with Bernardo Bortolotti of Turin University in Italy and William Megginson of the University of Oklahoma………………………………………..Full Article: Source


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