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Sovereign Wealth Funds Poised to Reach $7 Trillion by 2015

sovereign wealth fund assetsAs of November 2014, sovereign wealth fund assets totaled US$ 6.977 trillion compared to US$ 6.106 trillion in December 2013. This nearly US$ 900 billion increase can be attributed by improvements in investment returns and capital flows into sovereign wealth fund vehicles. In December 2007, sovereign wealth fund assets amounted to US$ 3.259 trillion. This unprecedented growth in public assets is having tremendous influence toward policymaking, economic stability, investment banking and asset management.

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By taking an average quarterly SWF asset growth figure from (December 2010 to September 2014) which equates to 3.16%, by December 2016, sovereign wealth funds could reach US$ 9 trillion in assets. Tweaking it to 5% quarterly growth in assets, by December 2016, sovereign wealth fund assets would be at US$ 10.3 trillion.

World’s Biggest Sovereign Wealth Funds

In addition, the world’s largest sovereign wealth funds, funds above US$ 100 billion, are the most active in making direct investments. Some of the world’s biggest sovereign wealth funds are the Abu Dhabi Investment Authority, Norway’s Government Pension Fund Global and the China Investment Corporation. According to data from the Sovereign Wealth Fund Transaction Database, sovereign wealth funds in total invested US$ 17.5 billion for the 1st 3 quarters of 2014 compared to US$ 12.95 billion for the 1st 3 quarters of 2013 in direct real estate.

Institutional Investors Remain Skeptical as Bitcoin Continues to Rise

Bitcoin has continued to rally over the past month – hitting a record US$ 8,224 in the early hours of November 20 – and institutional investors are beginning to take notice of the cryptocurrency’s increasing popularity. With a market value of more than US$ 130 billion, the digital currency has seen unprecedented growth of over 700% over the past year. But Bitcoin’s rise has also been marked by a number of volatile slumps, leaving institutional investors divided over its durability as a long-term store of value and wondering whether to get in on the action. Despite these headwinds, more than 100 hedge funds have been formed to trade in digital currencies.

Split Consensus on Wall Street

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3 Reasons Why Other Sovereign Funds Will Not Dump Oil Stocks

Norges Bank informed the country’s ministry of finance to recommend the wealth fund to remove oil and gas listed equities from the fund’s benchmark index. The central bank came to the conclusion that Norway’s Government Pension Fund Global (GPFG) would be less vulnerable to a permanent drop in oil prices if the wealth fund was not invested in oil and gas listed equities. For some academics there are arguments that wealth funds should diversify away from their sources of wealth. Contradictory studies have demonstrated that wealth funds should support industries that enhance the country’s sources of wealth. For example, earlier on, Norway’s fossil fuel wealth was buoyed by increased capital investment to the oil sector to increase output, a pre-cursor to the wealth fund’s explosive growth.

1. Stock Performance
For some sovereign investors, investments in master limited partnership in oil and gas have been strong driver of returns, or even in smaller fossil fuel listed companies. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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GIC Financially Backs Innovation Precinct Project in Melbourne

Singapore’s GIC Private Limited acquired a majority interest in a joint project located in Melbourne, Australia. The joint project is between Sydney-based Lendlease, Australia-based Urbanest and GIC. In 2014, the project was labeled Carlton Connect Initiative with the goal of being an innovation hub.

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