Feb 28, 2009

Follow The Money

The term Sovereign wealth fund was first used in 2005 by Andrew Romanov in an article entitled 'Who holds the wealth of nations? In the article, Mr.Romanov mentioned that “Typically, sovereign wealth funds are a by-product of national budget surpluses, accumulated over the years due to favorable macroeconomic, trade and fiscal positions, coupled with long-term budget planning and spending restraint. Usually, these funds are set up with one or more of the following objectives: insulate the budget and economy from excess volatility in revenues, help monetary authorities sterilize unwanted liquidity, build up savings for future
generations, or use the money for economic and social

Translation – Sovereign funds functioned as a vehicle through which cash rich nations could invest in fairly stable, promising investment products.

Follow The Money: The current global economic downturn offers some unique opportunities for cash-rich global funds to pick up choice assets at bargain prices. A brief study of the key holdings in some of these funds may offer some insights for would-be investors.

Note: I’m making an assumption that these sovereign wealth managers will make smart investment decisions. At the very least, we should notice some consistent themes  across funds from Asia, S/America & the Middle east.

Below is a list of 14 funds – which were featured in Mr.. Romanov's article, back in ‘05.

Country Fund Name Assets  ‘05 $B Assets Feb ‘09
United Arab Emirates Abu Dhabi Investment Authority $250,000 Billion $875 Billion
Norway Government Petroleum Fund $170,000 Billion $350 Billion
Hong Kong Investment Portfolio (HKMA) $100,000 Billion $173 Billion
Kuwait Kuwait Investment Authority $65,000 Billion $202 Billion
Singapore GIC $100,000 Billion $330 Billion
Brunei BIA $30,000 Billion $30 Billion
USA (Alaska) Permanent Reserve Fund $29,800 Billion $29 Billion
Russia Stabilization Fund $27,700 Billion $137 Billion
Malaysia Khazanah Nasional BHD $ 15,800 Billion 25.7 Billion
Trinidad & Tobago Revenue Stabilization Fund 460 Million 2.9 Billion
Canada Alberta Heritage $9,800 Billion 14.9 Billion
Chile Copper Stabilization Fund $3,900 Billion $21 Billion
Oman State General Reserve Fund $2,000 Billion $8.2 Billion
Venezuela FIEM $714M $~700M

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