Sovereign Wealth Funds – SWF

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You may call it the return of State capitalism. However phrased, Sovereign wealth funds (SWFs) are today key actors in the global financial landscape. The rise of their investment activity has been controversial. Initially depicted as the new “barbarians at the gate”, US politics turned them into the white knights of Wall Street. But now everything changes: the crisis will provide an automatic stabilizer of the global imbalances, and henceforth SWFs will appear less fearful than in the past. In any case, with asset worth more that US$3trn, SWFs are here to stay as liquidity providers to a distressed global economic system, especially if sound agreement on transparency will be established, also from the side of recipient countries, Europe included.

One of the unwanted consequences of globalization has been the resurgence of State capitalism in the form of sovereign wealth funds (SWFs) investment. Peaking oil prices and large trade surpluses have generated a huge amount of reserves that emerging countries are starting to invest to get higher returns. SWFs started with a low profile but will gain relevance in the control of target firms, increasing the risk of a political backlash and geopolitical tension.

In 2008, FEEM has launched a new research project on Sovereign Wealth Funds (SWFs) based on a comprehensive data collection of global deals involving these funds and empirical research on the effects of these investments. FEEM has established a partnership with Chatham House (also known as the Royal Institute of International Affairs) and Monitor Group in undertaking research on the emergence of these new economic actors. The goal of these projects will be to carry out an independent and rigorous analysis of this political sensitive topic.

Latest Reports:

Working Papers:

“Sovereign Wealth Fund Investment Patterns and Performance”
by B. Bortolotti, V. Fotak, W.L. Megginson, W. Miracky