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Sovereign Wealth Funds

Preqin: Sovereign wealth fund assets rise 13% for 12-month period

Sovereign wealth fund assets globally increased 13% to a record $7.45 trillion in the year ended March 31, Preqin said in a report. By comparison, sovereign wealth funds' assets grew just 1% for the year ended March 31, 2017, and by 3% over the year ended March 31, 2016.

Assets of sovereign wealth funds continue to grow despite interest rates and oil prices remaining at low levels and uncertainty permeating global markets, the report said.

Preqin analyzed the growth and asset allocations of 78 sovereign wealth funds. The 10 largest sovereign wealth funds have $5.49 trillion in assets, which equates to 74% of total sovereign wealth assets globally.

The assets of sovereign wealth funds grew by $866 billion in the 12 months ended March 31. Seventy-one percent of sovereign wealth funds saw their assets increase, up from 51% one year ago. Meanwhile, 19% saw a decrease, while 10% saw no change.

Notable sovereign wealth fund activity in the past year includes Norway's Government Pension Fund Global, Oslo, breaking the $1 trillion barrier by reaching $1.06 trillion in assets last month, while Russia's Reserve Fund ceased operations in early 2018 as its capital was used to cover budget shortfalls.

In terms of asset allocation, the largest proportions of sovereign wealth funds invest in public equities and fixed income at 82% and 78%, respectively. However, interest in real assets is increasing. Sixty-four percent and 59% of sovereign wealth funds invest in infrastructure and natural resources, respectively. This is an increase of 1 percentage point for infrastructure and 4 points for natural resources over the past 12 months.