REVEALED: Sustained Low Oil Prices May Prompt Larger Sovereign Fund Selloff


Over the past two decades, sovereign wealth funds, once obscure state funds, have moved closer to center stage as a prominent institutional investor class in terms of assets under management, investor style and asset diversification. In total, wealth funds have amassed more than US$ 7 trillion in assets, having less than a trillion before June 2001. These assets are reflected in many forms of investments such as Treasuries to public stock holdings, real estate and all the way down to life insurance policies. The rapid climb of sovereign wealth assets was stimulated by high oil prices, positive investment returns, quantitative easing policies and excess current account surpluses.

Two years ago, the cracks started to appear. Sovereign investors were confident in their ability to invest and acquire large illiquid assets.

REVEALED: According to SWFI research, in effect, about US$ 213.37 billion worth of listed equities were sold or exited by sovereign funds during the 2015 year.

This brief report will discuss, past, current and forecasted flows of listed equities in regard to the sovereign wealth fund universe. If oil prices remain the same, how much will sovereign wealth funds selloff?

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