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Can one say SWF is governmental version of private equity?

Not quite. Private equity normally seeks investment avenues in the primary market. In India, of late, foreign private equity has left a mark in the infrastructure arena, especially in ports. Sovereign Wealth Funds (SWFs) have displayed a distinct preference for secondary market, on the other hand, though there is nothing to stop them from taking up equity in a direct interface with company promoters a la private equity players.

Both however aim for returns from investment on equity which is considered to be better than from other sources in the long term. SWFs have come to be feared in some quarters especially if they are rooted in authoritarian regimes. Private equity has however thus far not been thus demonised.

S. MURLIDHARAN

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