Size of Sovereign Wealth Funds
I have written before for the blog about the emerging "sovereign wealth funds" (see: 1 2 3 4 5 6). This story from the Telegraph (UK) by Amrbose Evans-Pritchard (who, by the way, has done ag reat job covering the sub-prime meltodown) provides some statistics that I have not seen before:
- The size of the largest funds: "Abu Dhabi's ADIA ($875bn), Singapore's GIC ($330bn), Norway's Petroleum Fund $300bn), Russia's Stablisation Fund ($100bn, but growing fast)"
- The aggregate size of sovereign wealth funds: $2.20Bn, estimated by Morgan Stanley to grow to $12Tn by 2015.
- The share that these funds represent of total global assets: 2.5%, estimated also by Morgan to grow to 9% by 2015.
- Sovereign wealth funds are "already bigger than hedge funds".
The bulk of the story deals with German's ban on the purchase of certain German companies by these funds. The writer incorrectly identifies this as a breakdown of the EU's "fragile free-market consensus" under the "strain of globalisation". These funds result either from government ownership of resources of currency pegging.
Comments (3)
What a great rebranding! "Nationalization" becomes "sovereign wealth fund". How about "stolen wealth fund" instead?
Published: July 21, 2007 8:59 PM
Right, so basically by pegging the national currency with the US dollar, which is rapidly being devalued, they are in essence robbing the savings from the citizens of said nation. In return, those governments get to purchase American assets with the stolen savings from locals.
Published: July 21, 2007 9:20 PM
Equties now have political possibilities never seen befor. Economies with large surpluses are going to rapidly shift out of low yielding,inflation vunerable bonds into higer yielding equtiies which support their own economies and political agendas. This kind of direct economic and politcal pressure will cause countries with large deficits to have to rapidly institute more balanced trade and domestic economic policies.
The break down of the US hegamony and the expansion of Capital driven economies will put a lot of demand on the resource base upon which those economies depend. Trade surplus countries and recource supplier will be major players in the equity markets in a way never seen befor. The political impact will be huge. Sovereign-wealth funds will be the initial vehical for this movement
Published: August 5, 2007 11:08 AM