Sovereign wealth assets level off; alt-investments increase

graph_up_downThe value of assets managed by sovereign wealth funds (SWFs) has “levelled” in the past two years, with growth of just 3% and 1% in 2015 and 2016, respectively.

Preqin, a research firm, found that total assets under management (AUM) among these investors rose from $6.51 trillion (€6.14 trillion) in March 2016, to $6.59 trillion a year later.

This pace of growth is in sharp contrast to previous years, Preqin said in its ‘2017 Preqin Sovereign Wealth Fund Review’. Growth of 17% was recorded between December 2011 and December 2012, and by a further 16% the following year.

The proportions of SWFs investing in public equities and fixed income are falling: 79% of funds now commit to public equities, and 78% to fixed income products. However, 26% solely invest in these asset classes.

Conversely, SWFs are increasingly investing in alternative assets. Currently, 61% have allocations to private equity, and 63% to real estate, with an equal proportion investing in infrastructure.

Preqin currently tracks 76 active sovereign wealth funds, which collectively manage $6.59 trillion in assets.

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