Direct Sovereign Wealth Fund Transactions Grow in 2013

According to our proprietary Sovereign Wealth Fund Transaction Database, in 2013, sovereign wealth funds completed 1,883 direct transactions with a total value of US$ 66.05 billion, an increase US$ 1.38 billion from 2012. The number of direct transactions grew by 53.8% from 2012 and tripled the number of transactions compared to 2011. Emboldened sovereign funds amplified direct investments in a number of countries including Germany, Australia and China.

Direct Sovereign Wealth Fund Transactions by Year – Billions USD
sovereign wealth fund transactions
Source: Sovereign Wealth Fund Transaction Database

This reflects that larger sovereign wealth funds are investing directly into assets such as bonds, stocks, real estate and even infrastructure. In general, sovereign funds have had the augmented capabilities to attract talent to improve internal operations and deal sourcing. Another interpretation is that sovereign funds are investing frequently, but in lower deal amounts. One explanation is that through 2007-2009, sovereign funds bailed out financial institutions, domestic governments and bet big on large industrial companies.

Popular Sectors for Direct Sovereign Wealth Fund Investment

The real estate sector dominated 2013, with over US$ 17.5 billion recorded in direct sovereign wealth fund transactions. This was followed by the financial sector at around US$ 11 billion and the materials sector at approximately US$ 9.2 billion.

Top 5 Sectors for 2013 – Direct Sovereign Fund Transactions

Sector Weight
Real Estate 27%
Financials 17%
Materials 14%
Energy 10%
Utilities and Infrastructure 8%
Other Sectors 24%

Source: Sovereign Wealth Fund Transaction Database

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