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Sovereign Wealth Funds Grow Fast
The international market research group Global Insight published a report yesterday indicating that the total volume of assets in state investment funds (so-called sovereign wealth funds) grew by 27 percent in 2007 and, even while aiding several financial corporations hit by the mortgage crisis in the West, they continue to exert influence on the world financial market. The Middle Eastern countries, China, Singapore, South Korea, Norway, Russia (the stabilization fund) and the oil-producing countries of Africa have the largest sovereign wealth funds.
According to Global Insight, the total value of sovereign wealth funds reached $3.5 trillion in 2007, which is significantly greater than the total of hedge funds ($1.5 trillion). At the current rate of growth, the report's authors say, the amount of capital in sovereign wealth funds will exceed the GDP of the United States in 2016, and of the European Union the following year.
Sovereign wealth funds invested $80 billion in American financial corporations last year after the mortgage crisis, and that trend continues this year. In January of this year, Citigroup sold 4 percent of its stock to GIC for $6.9 billion. Merrill Lynch received an equal amount from investors that included sovereign funds from South Korea and Kuwait close to the same time.
The Abu Dhabi Investment Authority is the largest sovereign wealth fund, with $900 billion. The largest generator of sovereign investment funds (calculated as the gold and currency reserves of a country minus the cost of imports for four months) is China, at about $1.2 trillion. Russia is second with $350 billion. The fastest growing funds are those of Nigeria (291%), Oman (256%), Kazakhstan (162%), Angola (84%) and Russia (74%).
www.kommersant.com
All the Article in Russian as of Apr. 29, 2008
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