Sovereign Wealth Funds Fear Spanish Bonds

Recently, the Abu Dhabi Investment Authority (ADIA) removed Spain from its fixed income benchmark index for Europe. In other words, ADIA will not be allocating capital to Spanish bonds any time soon. From Norges Bank Investment Management’s website, they currently hold about US$ 3 billion worth of Spanish government debt. Sovereign wealth funds like the China Investment Corporation believe that the Euro crisis is deepening and that the Eurozone may break up. In fact, the CIC views that there is too much risk and too little return in Europe’s public markets. Instead they will focus more on private equity, infrastructure, and other direct investments.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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