PR Log (Press Release) –
Mar 06, 2009 – In spite of making substantial losses to the tune at least $60 billion on account of investments in US, Swiss and UK banks, the assets under management of sovereign wealth funds (SWFs) increased 18% in 2008. They reached $3.9 trillion according to a new research report from International Financial Services (IFS), London. IFSL expects assets of SWFs to double to $8 trillion by 2015.
The report titled Sovereign Wealth Funds 2009 states that in addition to investments, there was an additional $5.5 trillion held in other sovereign investment vehicles, such as pension reserve funds, development funds and state-owned corporations’
funds and also $6.1 trillion in other official foreign exchange reserves.
Marko Maslakovic, Senior Economist at IFSL said “SWFs have increased their influence on global financial markets since the start of the credit crisis. London is an important centre for SWFs both as a clearing house for transactions and a location from which some funds are managed. The many advantages it offers as a business location should allow it to capture a growing share of this market in the coming years.”
The countries with SWFs funded by commodities’ exports, primarily oil and gas exports, dominate the landscape. They totalled $2.5 trillion. On the hand, the non-commodity SWFs were funded by transfer of assets from official foreign exchange reserves, and in some cases from government budget surpluses, pension reserves and privatisation revenue. They amounted to $1.4 trillion at the end of 2008. Interestingly, non-commodity SWFs are projected to increase their 35% share of assets in 2008 to 55% by 2015.
However, the SWFs’ assets may not grow at similar pace going forward due to falling commodity prices, global economic downturn and SWFs' focus on injecting liquidity in their local economies.
