For more stories on sovereign wealth funds, click on
LONDON, March 1 Assets under management by
sovereign wealth funds fell by 3 percent in 2009 to $3.8
trillion although they are set to increase to $5.5 trillion in
the next couple of years, a London-based think tank said on
International Financial Services London (IFSL> also said
that sovereign investment vehicles, such as pension reserve
funds and development funds, held an additional $6.5 trillion,
up 13 percent from the previous year.
"In 2009 SWFs gradually started to regain their appetite for
foreign investment," IFSL said in a report.
"Recent SWF transactions suggest that acquisitions will be
smaller and more diverse in the coming years with more focus on
diversifying portfolios by investing in real estate, commodities
and emerging markets."
The IFSL said mark-to-market value of their portfolios rose
15 percent last year, although they still held losses on
investments at the outset of the credit crisis.
It said SWFs invested $10 billion in the first half of 2009,
the slowest start to a year since 2005. Activity picked up in
the second half, and much of the $50 billion they invested in
this period was in foreign markets.
The financial services accounted for less than a fifth of
investments last year, compared with its share of 45 percent
seen since the start of the decade.
Instead, a larger proportion of funds was allocated to
industry, infrastructure and other sectors, with the China
Investment Corporation investing $15 billion in energy, metals,
agriculture and alternative assets.
The IFSL also said London was an important centre in the SWF
industry as a clearing house and location from where some of
these funds are managed.
(Reporting by Natsuko Waki; editing by Patrick Graham)