Sovereign wealth funds worldwide are expected to grow by 50% in two years to an estimated combined $6 trillion in assets, according to data from the Milken Institute.
The growth is expected from a combination of the creation of more sovereign wealth funds and an improving economy, Patrick Mitchell, senior managing director and portfolio manager at Guggenheim Partners, said Wednesday at the Milken Institute Global Conference in Beverly Hills, Calif.
Last year, the total assets invested by sovereign wealth funds fell but the number of investments grew, said Drosten Fisher, principal with consulting firm Monitor Group, unveiling research at the conference Wednesday. Sovereign wealth funds invested $53 billion in 172 investments in 2010 compared to $69 billion in 113 investments the year before.
Half of the assets in 2010 were invested by Middle East and North Africa-based sovereign wealth funds. Most of the MENA sovereign wealth funds' assets, $13.5 billion in 17 transactions, were invested in the Asia Pacific region. Some $7.5 billion was invested by MENA sovereign wealth funds in 14 deals in Europe and $2.7 billion in one deal in Latin America.
Asian sovereign wealth funds were the most active, with more than half of the number of transactions, 51, worth a combined $11.5 billion. Much of the remainder — $8.6 billion in 23 deals — were in North America.