In the news
- Norway's sovereign wealth fund drops over 50 coal companies
- Sovereign-Wealth Funds Agree to Invest $380 Million in Italian Property
- Brazil Dips Into Sovereign Wealth Fund as Finances Deteriorate
- Russia's Direct Fund Interested in Cuba Deals as Economy Expands
- Why the Saudis Aren’t Cutting Production
- Xi to Sinking Shares: Arise, Ye Wretched of the Earth
- China to move £500bn sovereign wealth fund to New York
- Norwegian wealth fund invests in African growth
- The Trouble With Sovereign-Wealth Funds: "Kazakhstan’s $55 billion sovereign-wealth fund helped pull the country through the global financial crisis and offered funding for the country’s bid to host the 2022 Winter Olympics. But the collapse in oil prices has hit Kazakhstan and its fund, Samruk-Kazyna JSC, hard. In October, the fund borrowed $1.5 billion in its first syndicated loan to help a cash-strapped subsidiary saddled with a troubled oil-field investment."
Preqin Blog, 2012: "There has been a 16% increase in the number of sovereign wealth funds investing in infrastructure since 2011."
Avendano and Santiso: Are sovereign wealth fund investments politically biased?
Alexander Dyck and Adair Morse: Sovereign Wealth Fund Portfolios: "SWF allocations are balanced across risky asset classes, very home-region biased, and very biased toward certain industries, in particular, toward finance (owning 4.8% of world equity) and transportation, energy and telecommunication. SWFs invest actively (with control rights) in both public and private sectors, but mainly in these industries in their home regions. We use these allocations to understand better the objectives that drive SWF investment decisions. We find evidence for financial portfolio investor benchmarking and for hedging of income covariance risk. We introduce and test an industrial planning hypothesis as an alternative objective and find this has considerable explanatory power. We find that both measures to capture financial portfolio and industrial planning objectives together explain 14.4% of SWF portfolio variation. Of this, industrial planning accounts for 45%. There is significant variation in the power of industrial planning objectives across SWFs revealing important heterogeneity in this investor class. Industrial planning helps to explain active ownership, predicting higher ownership stakes."
Shai Bernstein, Josh Lerner, Antoinette Schoar: The Investment Strategies of Sovereign Wealth Funds: "SWFs with external managers tend to invest in lower P/E industries, which see an increase in the P/E ratios in the year after the investment. By way of contrast, funds with politicians involved invest in higher P/E industries, which have a negative valuation change in the year after the investment."
Gordon L. Clark andAshby H. B. Monk: The Oxford Survey of Sovereign Wealth Funds' Asset Managers
The Journal of Portfolio Management: The Norway Model
Richard A. Epstein† and Amanda M. Rose: The Regulation of Sovereign Wealth Funds: The Virtues of Going Slow
Adam D. Dixon and Ashby H. B. Monk: Rethinking the Sovereign in Sovereign Wealth Funds