Sovereign Funds Increase Energy and Utility Sector Investments in the First Quarter

oilFor the first quarter of 2013, sovereign wealth funds have come out strong investing directly in energy and utility investments. Direct transaction data for the first quarter of 2013 is not fully complete; the total so far for the first quarter of 2013 is US$ 2.98 billion. Already the direct transaction amount for this quarter is greater than fourth quarter 2012’s total of US$ 810 million. This is the highest quarterly transaction total in the energy and utility sector since the first quarter of 2012 which amounted to US$ 4.37 billion.

Sovereign fund direct investments in energy tend to be opportunistic such as investing in distressed situations.

Singapore’s Temasek Holdings investment in Spain-based Repsol SA represented a significant portion of the deal value total. Other influencing direct transactions include the Kuwait Investment Office and the Government of Singapore Investment Corporation making large market purchases in National Grid Plc. Non-commodity sovereign funds have increased allocation to energy and utility sectors. Commodity-based sovereign funds are double exposed to resource prices.

Direct Sovereign Wealth Fund Transactions

Period Energy and Utilities – Billions USD
Q2 Y2012 0.74
Q3 Y2012 1.55
Q4 Y2012 0.81
Q1 Y2013 2.98

Source: Sovereign Wealth Fund Transaction Database

Learn more: Sovereign Wealth Fund Transaction Database

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