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SOVEREIGN WEALTH FUNDS A statistical overview

SOVEREIGN WEALTH FUNDS A statistical overview. Marko Maslakovic Senior Economist International Financial Services, London www.ifsl.org.uk. Sovereign investment vehicles. $ trillion.

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SOVEREIGN WEALTH FUNDS A statistical overview

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  1. SOVEREIGN WEALTH FUNDSA statistical overview Marko Maslakovic Senior Economist International Financial Services, London www.ifsl.org.uk

  2. Sovereign investment vehicles $ trillion • Government controlled and owned pools of funds funded by official reserves,but managed and invested separately. • Typically held in foreign assets and invested for the long-term. • Some over 50 years old / more than a half at least 10 years old • Vary in size, mgt. structure, sources of funds, use of funds (stabilisation, savings)

  3. Growth of SWFs’ assets $ trillion 64% Commodity 87% 13% 36% Non-commodity To reach: $5 trillion by 2010 and $10 trillion by 2015

  4. Global funds under management $ trillion, end-2007 SWFs are, however, increasing at a greater pace and their influence on global markets will grow in the coming years

  5. Where is the money coming from?Global current account imbalances $ trillion Euro Area Asia Oil Exporters United States Shift in structure of global finance - rise in importance of Emerging Markets

  6. Sources of SWFs’ assets • Commodity sources (around 2/3 of total) • Export of Oil • Gas • Copper, etc... • Non commodity sources (around 1/3 of total) • Official foreign exchange reserves • Pension funds • Fiscal surpluses • Privatisation receipts by 2010 (60% commodity / 40% non-commodity)by 2015 (48% commodity / 52% non-commodity)

  7. SWFs market share by continent % share, end-2007 • United Arab Emirates + Singapore + Norway + China + Saudi Arabia = 75% • Highly concentrated – in total around 50 SWFs

  8. Commodity sources Oil exporting countries’ foreign investments assets % share, end-2007 Total: $4.1 trillion Growth at a compound annual rate of around 20% since 2000.

  9. Non-commodity sources Official foreign exchange reserves % share, end-2007 Total: $6.5 trillion

  10. Asian official FX reserves $bn 63% of world total Other Asia 44% of world total China Growth at a compound annual rate of around 20% since 2000.

  11. The UK’s position on SWFs • The UK Government is commited to ensuring the UK remains an open and competitive market for international investment • The UK has a regulatory, competition and national security framework that ensures that all foreign investment (whether from a SWF or not) meets the appropriate criteria

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