Preqin’s latest report, the 2010 Preqin Sovereign Wealth Fund Review, reveals that the aggregate total assets of all sovereign wealth funds (SWFs) has continued to increase over the past year. The recovery in global equities markets helped certain SWFs regain ground lost as a result of the economic downturn. However, some funds have been used by national governments to cover budget deficits and support financial institutions.
Key facts on sovereign wealth funds
:- The aggregate total assets under management of all sovereign wealth funds currently stands at an estimated $3.51 trillion, representing a 9% increase from one year ago, when the figure stood at $3.22 trillion.
- One of the largest increases in total assets came at Norway’s Government Pension Fund – Global, which reported returns in 2009 of over 25% and now has well over $400 billion in assets under management.
- One of the largest decreases in total assets came at Russia’s Reserve Fund, which has more than halved in size over the past year, with total assets now standing at around $60 billion. Reserve Fund has been subject to withdrawals by the Russian government to assist in covering the federal fiscal deficit.
- Sovereign wealth funds based in Asia control 40% of the aggregate total assets of all sovereign wealth funds. Those based in MENA control 35%, and Europe-based SWFs manage 19%.
- Nearly 80% of all SWFs are known to invest in public equities, and a similar number invest in fixed income. Sovereign wealth fund activity in alternative asset classes is considerable, with 55% known to invest in private equity, 51% in real estate, 47% in infrastructure and 37% in hedge funds.
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