Sovereign wealth fund (SWF) investments witnessed a 36 per cent dip in 2012 from 2011 levels as managers played it cautious amid global economic uncertainty. SWFs invested just $57.3 billion of fresh capital last year, in comparison with $89.5 billion in 2011, the lowest level since 2006.

As a consequence of the reduced budget, sectors such as healthcare and energy witnessed a reduction in SWF investments in 2012 vis-à-vis 2011. SWF spends on healthcare and utilities fell by more than half and their energy investments dipped by 46.8 per cent.

On the other hand, SWF investment in consumer goods firms shot up by 127.9 per cent and information technology spends by 90.1 per cent in 2012 from year-ago levels.

Data for the 2007-12 period reveals that financial service firms were the top picks for global SWFs during the five-year period, with investments in the sector totalling $140 billion.

Real estate was another SWF focus area, with investments aggregating to $61 billion between 2007 and 2012. Energy and infrastructure attracted $57 billion and $52 billion, respectively, while the industrial sector garnered $34 billion.

The Top-10 sovereign wealth funds globally manage assets worth $4 trillion, equivalent to more than two times India’s annual gross domestic product. These are Norway’s Government Pension Fund, the Abu Dhabi Investment Authority, China’s SAFE Investment Company, Saudi Arabia’s SAMA Foreign Holdings, China Investment Corporation, Hong Kong Monetary Authority Investment Port, Kuwait Investment Authority, Government of Singapore Investment Corporation, Singapore’s Temasek Holdings and Russia’s National Welfare Fund.

(This article was published on March 25, 2013)
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