SOVEREIGN WEALTH FUNDS A statistical overview

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SOVEREIGN WEALTH FUNDS A statistical overview
Marko Maslakovic Senior Economist International
Financial Services, London www.ifsl.org.uk
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Sovereign investment vehicles
trillion

• Government controlled and owned pools of funds
  funded by official reserves, but managed and
  invested separately.
• Typically held in foreign assets and invested
  for the long-term.
• Some over 50 years old / more than a half at
  least 10 years old
• Vary in size, mgt. structure, sources of funds,
  use of funds (stabilisation, savings)

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Growth of SWFs assets
trillion
64
Commodity
87
13
36
Non-commodity
To reach 5 trillion by 2010 and 10 trillion by
2015
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Global funds under management
trillion, end-2007
SWFs are, however, increasing at a greater pace
and their influence on global markets will grow
in the coming years
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Where is the money coming from?Global current
account imbalances
trillion
Euro Area
Asia
Oil Exporters
United States
Shift in structure of global finance - rise in
importance of Emerging Markets
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Sources of SWFs assets

• Commodity sources (around 2/3 of total)
• Export of Oil
• Gas
• Copper, etc...
• Non commodity sources (around 1/3 of total)
• Official foreign exchange reserves
• Pension funds
• Fiscal surpluses
• Privatisation receipts

by 2010 (60 commodity / 40 non-commodity)by
2015 (48 commodity / 52 non-commodity)
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SWFs market share by continent
share, end-2007

• United Arab Emirates Singapore Norway
  China Saudi Arabia 75
• Highly concentrated in total around 50 SWFs

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Commodity sources
Oil exporting countries foreign investments
assets share, end-2007
Total 4.1 trillion
Growth at a compound annual rate of around 20
since 2000.
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Non-commodity sources
Official foreign exchange reserves share,
end-2007
Total 6.5 trillion
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Asian official FX reserves
bn
63 of world total
Other Asia
44 of world total
China
Growth at a compound annual rate of around 20
since 2000.
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The UKs position on SWFs

• The UK Government is commited to ensuring the UK
  remains an open and competitive market for
  international investment
• The UK has a regulatory, competition and national
  security framework that ensures that all foreign
  investment (whether from a SWF or not) meets the
  appropriate criteria