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Despising and Embracing Sovereign Wealth

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cityThe sheer size and reach of sovereign wealth funds steered government policymakers’ attention. In 2007, politicians asserted, “how can these governments buy up our prized national assets?”

In 2012, the message was “will they buy our bonds now?”

The protectionist attitude towards sovereign wealth funds has changed dramatically and it wasn’t because of the Santiago Principles or a change of heart. It was a necessity created by the financial crisis for Western nations to maintain their welfare state and standards of living. Spanish and Italian government officials have courted Asian sovereign wealth funds and central banks. British government officials have courted their Gulf partners. Sovereign wealth funds have been courted to purchase European sovereign debt, but they prefer companies, properties, and real assets.

The rapid growth of state-owned accumulated assets versus pension asset growth has spurred interest among fund managers and financial institutions. The finance media followed the bandwagon of the sovereign wealth moniker just as when private equity and hedge fund were trending.

April 2012, sovereign wealth funds are basically at US$ 5 trillion, Occidental governments have taken notice of this. In 2007, sovereign asset growth was projected by some investment banks to double or at least triple, but this did not come true because of the devastating effects of the financial crisis of 2008.

Korea’s NPS Invests In Crypto Exchanges Amid Crackdown

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South Korean news outlets have reported that South Korea’s National Pension Service (NPS) has unwittingly invested roughly US$ 2.4 million in four local cryptocurrency exchanges – Korbit, Upbit, Coinplug, and Bithumb – even as regulatory officials move to subdue the unbridled enthusiasm for crypto trading that has flourished in the tiny country. The US$ 550 billion pension scheme invested in the cryptocurrency exchanges indirectly through two venture capital funds handled by external managers with exclusive rights over asset allocation, according to an NPS officer.

Crypto trading has proved wildly popular in South Korea, drawing an estimated one million citizens to the largely unregulated exchanges that have cropped up over the past few years. South Korea, which is ranked first in the world in terms of internet sped, is the largest market for cryptocurrency transactions behind Japan and United States, and accounts for 29.8% of trade globally, according to a report released by the Korea Insurance Research Institute (KIRI) in December 2017.

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Ripple Attempts to go the Central Bank Route

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San Francisco-based Ripple, a tech company that professes the use of blockchain to reboot the payment systems globally, landed a big deal with the Saudi Arabian Monetary Authority (SAMA). Ripple started a pilot program that will be spearheaded by SAMA and a few Saudi banks to deploy xCurrent for cross-border payments. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Investment Corporation of Dubai Eyes $1 Billion Loan Deal

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The Investment Corporation of Dubai (ICD) plans to raise US$ 1 billion in a loan to refinance existing debt. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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