Global Insight Weekly Newsletter
Sovereign Wealth Fund Tracker
Unparalleled coverage of Sovereign Wealth Funds, their investment strategies, and the controversies that surround them
Countries rich in foreign exchange reserves – often oil-derived – have emerged as some of the most powerful global investors. Some $80 billion has already been ploughed into bank shares or bank equity stakes in the U.S. alone. In the wake of the current credit crunch, developed economies have generally welcomed the timely infusion of capital, but there is growing unease too.
Governments are concerned that foreign ownership of key domestic assets (including corporations, banks and infrastructure) may threaten national security, and they are pressing the funds to be more transparent about their management and strategy. For three years in a row, Sovereign Wealth Funds have grown a remarkable 24% annually, and now exceed some $3.5 trillion.
If growth rates remain constant, they will surpass the entire current economic output of the United States by 2015, and Europe by 2016. Their importance already rivals that of hedge funds and private funds combined.
* Will Sovereign Wealth Funds continue this incredible growth?
* How much resistance are they likely to encounter, and where?
Introducing: Sovereign Wealth Fund Tracker
Global Insight's Sovereign Wealth Fund Tracker provides an in-depth account of funding sources; evolving regulatory and policy environments; and investment strategies. This pilot edition is provided as a free trial. To subscribe to comprehensive quarterly updates, please register your interest with Global Insight.
The report comprises a global summary, 3 regional overviews, and a section on recipient countries (G7 plus Switzerland and Australia). Commentary and data tables include:
- Detailed 3 year forecasts of sovereign wealth growth by country, broken down by type
- Overall sovereign wealth forecast out to 2016
- Analysis and implications of significant events by country within each region
- Legal and policy environments affecting sovereign wealth flows
- Detailed coverage of institutional and market developments, investment vehicles, and specific mergers and acquisitions
Key findings of the Sovereign Wealth Fund Tracker:
- The largest Sovereign Wealth (SW) generator remains China, with approximately US$1.2 trillion, followed by Russia and Kuwait.
- The fastest growing generators of SW over the last five years were: Nigeria 291%: Oman 256%; Kazakhstan 162%; Angola 84%; Russia 74%; and Brazil 65%.
- High energy and commodity prices, combined with a declining dollar, have turbocharged Sovereign Wealth Funds (SWF) in the Middle East, and spawned a new generation of these Funds.
- Record inflation in SWF countries is the new "push factor" behind SWF's foreign expansion. Inflation has intensified in China, U.A.E, Saudi Arabia, Russia and Kuwait, creating pressure to invest domestic money abroad.
- The vast majority (93%) of SWF equity investment has so far targeted the western financial sector. But there is new interest in energy and mining companies.
- In January 2008 alone, worldwide acquisitions by SWF's totalled US$20.6 billion or nearly one-third of the total US$60 billion that SWFs made in mergers and acquisitions (M&A) for the entire year 2007. SWFs accounted for 35% of world M&A activity in 2007, and 28% of all M&A in the US during January 2008, exceeding M&A activity from private equity buyouts, which fell in the last quarter of 2007, as the credit crunch unwound debt leveraging.
- SWFs have fostered new alliances with private equity to avoid scrutiny. SWFs already account for approximately 10% of private equity investments globally and should grow further in the next few years.
The "Sovereign Wealth Fund Tracker," part of Global Insight's Sovereign Risk Service, provides in-depth analytical quarterly reports on SWF activity, including funding sources, evolving legal and policy environments affecting SW flows, and investment strategies, investment vehicles and specific mergers and acquisitions.
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*** Note developments above provided in totality from Global Insights -- http://www.globalinsight.com/
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