The Global Expansion of Sovereign Wealth Funds

    20 May 2008

    Sovereign wealth funds (SWFs), backed by swelling foreign exchange reserves, have shot up the foreign investment rankings. Managing an estimated $3 trillion in assets globally, SWFs have injected $53.5bn into the finance sector alone since September 2007. Deals with US banks boosted figures – Citigroup received $20bn from investment led by the Government of Singapore Invest- ment Corp and Abu Dhabi Investment Au- thority, Merrill Lynch gained $12.8bn from investment led by Kuwait Investment Authority and Temasek Holdings and Morgan Stanley received $5bn from an investment group led by China Investment Corp. Europe also made the headlines with Switzerland’s UBS accepting $11.5bn from an investment led by the Government of Singapore Investment Corp. With SWFs continuing to take key minority stakes in western companies, the International Monetary Fund (IMF) is backing plans for best practice guidelines for SWFs in an attempt to dampen growing fears about their methods and motivations. But how calls for transparency will affect the flow of SWF investment remains to be seen.



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