Sovereign funds globally have added over USD 750 billion to their total assets under management over the last year, from USD 4.62 trillion in 2012 to USD 5.38 trillion in 2013, according to Preqin sovereign wealth fund review.
This growth, which is the largest annual increase in total sovereign wealth fund assets since Preqin began tracking this information, can be accounted for by both the number of new sovereign wealth funds formed over the last few years, as well as capital injected into existing sovereign wealth funds.
Interestingly, Asia-based sovereign wealth funds have shown some of the largest growth in assets under management, with the assets of these sovereign wealth funds growing, on average, by 19% since 2012, it said.
This is in comparison to the average 6% growth in assets under management exhibited by Middle Eastern sovereign wealth funds, it said. 'In fact, Asia-based sovereign wealth funds account for a significant 47% of global aggregate sovereign wealth fund assets, despite only representing 22% of sovereign wealth funds globally by number.'
Amy Bensted, head of hedge fund products, Preqin said, ''Despite the challenging financial landscape and political unrest, sovereign wealth funds have continued to thrive and to grow, and this trend is predicted to continue over the next few years. We are still seeing new launches of sovereign wealth funds, with many countries approving plans for new launches over 2012-13. There remains the possibility that some sovereign wealth funds may be required to cover fiscal shortfalls of governments but overall the outlook for this investor group appears positive. The level of capital flowing into alternatives from sovereign wealth funds remains extremely significant. Once the newly established sovereign wealth funds become more developed, we could see a number of new allocators to the space.''