Sovereign Wealth Funds Manage Over $5T

Oct 10 2013 | 8:14am ET

The world's sovereign wealth funds manage total assets of $5.38 trillion, but are putting less of that money into hedge funds and private equity.

Data provider Preqin said sovereign wealth funds have added over $750 billion to their coffers since 2012. The increase in AUM can be accounted for in part by an increase in the number of sovereigns (eight new funds have been formed in the past two years) and in part by the capital injected into existing funds.

But whereas in 2012, 57% of sovereigns were invested in private equity and 38% in hedge funds, those totals now stand at 45% an 31%, respectively. Prequin blames some of the decline on the increase in the number of sovereigns, as new funds generally spend a few years building investment teams and accumulating assets before allocating to alternatives.

Asia-based sovereigns reported some of the strongest growth, their assets rising on average by 19% since 2012, while those of Middle Eastern funds rose 6%. Asia-based funds now account for 47% of total sovereign fund assets despite representing only 22% of sovereign wealth funds by number.

The largest sovereign wealth fund is Norway's Government Pension Fund-Global, with $775.2 billion  in AUM (an increase of $185 billion since 2012).

“Despite the challenging financial landscape and political unrest, sovereign wealth funds have continued to  thrive and to grow, and this trend is predicted to continue over the next few years,” said Preqin's Amy Bensted in a statement. “We are still seeing new  launches of sovereign wealth funds, with many countries approving plans for new launches over 2012-13. There remains the possibility that some sovereign wealth funds may be required to cover fiscal shortfalls of  governments but overall the outlook for this investor group appears positive. The level of capital flowing into alternatives from sovereign wealth funds remains extremely significant. Once the newly established sovereign wealth funds become more developed, we could see a number of new allocators to the space.”


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.