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Sovereign wealth funds assets grow to USD3.51trn

The aggregate total assets under management of all sovereign wealth funds currently stands at an estimated USD3.51trn, representing a nine per cent increase from one year ago when the figure stood at USD3.22trn, according to research by Preqin.

One of the largest increases in total assets came at Norway’s Government Pension Fund – Global, which reported returns in 2009 of over 25 per cent and now has over USD400bn in assets under management.

One of the largest decreases in total assets came at Russia’s Reserve Fund, which has more than halved in size over the past year, with total assets now standing at around USD60bn. Reserve Fund has been subject to withdrawals by the Russian government to assist in covering the federal fiscal deficit.

Sovereign wealth funds based in Asia control 40 per cent of the aggregate total assets of all sovereign wealth funds. Those based in Mena control 35 per cent and Europe-based sovereign wealth funds manage 19 per cent.

Nearly 80 per cent of all sovereign wealth funds are known to invest in public equities, and a similar number invest in fixed income. Sovereign wealth fund activity in alternative asset classes is considerable, with 55 per cent known to invest in private equity, 51 per cent in real estate, 47 per cent in infrastructure and 37 per cent in hedge funds.

“The increase in the aggregate assets under management of sovereign wealth funds, which has been assisted by the start of the global recovery, demonstrates that their collective influence in the world of institutional investors has not diminished. Many SWFs that had put portfolio diversification plans on hold are now considering resuming these plans, and their appetite for alternative investments continues to increase,” says Sam Meakin, managing editor of the 2010 Preqin Sovereign Wealth Fund Review.

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