The Largest Sovereign Wealth Fund Private Equity Investors

top 10 gamechangers

The aggregate dollar amount of sovereign wealth fund capital toward private equity and private markets is expanding rapidly, according to data from the Sovereign Wealth Fund Institute (SWFI). SWFI researchers estimate, as of June 2015, US$ 415.36 billion was allocated to private equity, this includes direct stakes in private companies, not just interests in private equity funds. By calculating June 2015 total sovereign wealth fund assets, private equity makes up around 5.7% of all SWF assets. Despite falls in oil and commodity prices, sovereign funds continue to grow and build up exposure to private equity assets. Many of these institutional investors are driven by harvesting the illiquidity premium.

According to SWFI, the top 10 private equity sovereign wealth fund allocators either come from the Middle East or Asia in terms of dollar-for-dollar allocation, not percentage of portfolio assets.

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Sovereign funds have been both direct investors in private companies and allocators to private equity funds. Examples of this include: Qatar Investment Authority investing in Uber Technologies, New Zealand Superannuation Fund buying a stake in glass tint company View Inc., Korea Investment Corporation investing in PetSmart, and GIC investing in Veritas. Wealth funds maintain a strong willingness and desire in many cases to invest in private equity funds. For example, Abu Dhabi Investment Authority investing in an Ares Management fund or the China Investment Corporation investing in a Blackstone Group or Vista Equity Partners fund, wealth funds are keen on identifying top-quartile managers.

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