Over the past two decades, the boundaries between the public sector and institutional investing have been blurring with the growth of sovereign investors. Sovereign wealth investors (including public pension funds, sovereign funds, and state-owned enterprises) are strong and discreet representatives of the heterogeneous matrix of institutional investors which support capitalism as we know it today. With assets amounting to $8 trillion, sovereign wealth funds (SWFs) own on average 5% of all listed equities globally, yet, little is known about them. SWFs became more prevalent in the global finance during the Great Crisis of 2008, when they saved multiple Western core financial institutions.
Since then, SWFs from the Middle East, China, Singapore or Africa, have sophisticated their investment strategies. This research program helps better understand this critical long-term investor group and the transformative role SWFs might play on central areas such as technology disruption, sustainable finance, economic development and corporate governance.
The program produces an Annual Report on Sovereign Wealth Funds, peer-reviewed papers in top academic journals and academic book chapters. Activities include an Annual Conference Agents of Change: Sovereign Wealth Funds, closed-door Seminars with regional and industry, open conversation spaces with sovereign wealth stakeholders and training programs on sovereign wealth strategies.
INVESTING IN A DIFFERENT WORLD ORDER
The 2023 edition of the Sovereign Wealth Funds report investigates the latest trends in the field, examines the biggest transactions and identifies the preferred areas of investment.
This year, the following investments stand out: technology, infrastructure (especially renewable energies), the industrial sector, biotechnology and health.
The 2022-2023 period marked a historical record in the volume of assets under management by sovereign funds, which reached 11.4 trillion dollars.
Geographically, the United States is consolidating its position as leader in attracting sovereign investments, in a geopolitical context of blocs that penalizes investments in China and increases the share received by countries such as India, the United Kingdom or Saudi Arabia.
The 2023 report analyzes in depth the difficult task of sovereign funds to reconcile short-term results with long-term investment horizons in the current context of inflation and high interest rates.
The report also examines the role of sovereign funds in the field of sustainability and evaluates the potential of sovereign funds in Latin America, in coordination with the development agencies and banks present in the region.
Finally, the report focuses on the role of funds in Spain, which this year reached record numbers and presents new features with the arrival of Cofides’ FOCO fund.