How do Sovereign Wealth Funds Invest? Less and Less Contrarian

  • This report is an update to our bi-annual report on investment trends among Sovereign Wealth Funds (SWFs). Our key conclusion is that SWFs - as a group - have become less contrarian and are investing more in line with other institutional investors.

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Elliot Hentov
Head of Policy and Research
Alexander Petrov
Policy Research Strategist

Key Points

  • Overall SWF’s asset allocation has essentially stabilized, with only a marginal further re-allocation to private markets1 ; the number of SWFs has shrunk due to mergers.
  • While oil funds continue to have a markedly higher average allocation to alternatives than non-oil funds, we observe that the fund size has become a more important predictor of asset allocation than the fund origin.
  • The changes in SWFs’ average asset allocation have reached full synchronization with the global asset management industry, indicating the maturing of SWFs as an institutional segment.
  • In the next two years, we expect some further consolidation and a stable overall asset allocation, unless a significant market downturn causes a systematic change.

1 In this study, we use the terms ‘alternatives’ and ‘private markets’ interchangeably to denote all asset classes which cannot be categorized as cash, fixed income or equity, such as real estate, private equity, private debt and commodities.