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Four of UAE’s SWFs in world’s top 20 largest funds

DUBAI, January 25, 2022

Four of the UAE’s sovereign wealth funds (SWFs) appear on the world’s top 20 largest funds list, said leading financial services PR firm Financepr.com in a new report, adding that the country seems open to the option of alternative investments.

Abu Dhabi Investment Authority (ADIA), the Investment Corporation of Dubai, Mubadala Investment Company, and ADQ allocate 25%, 65%, 48%, and 58%, respectively to alternative investments, it added.

Saudi Arabia’s National Development fund allocates its asset funds to alternative assets. The fund ranks 18th on the list of the largest SWFs, with $93 billion assets under management. The Public Investment Fund (PIF) manages assets worth $480 billion and allocates 56% of this to alternative investments.

As of January 2022, the world’s top 10 largest sovereign wealth funds (SWFs) manage assets worth $7.4 trillion, the Financepr.com report said.

The world’s largest SWF, Norges Bank Investment Management (NBIM), handles assets worth $$1.33 trillion. According to the data presented by Financepr.com, the Norwegian Central Bank comes right ahead of China Investment Corporation, whose assets under management total $1.222 trillion.

The two sovereign wealth funds (SWFs) are the only ones whose assets surpass the $1 trillion mark. Other SWFs that made it to the list of the largest funds include the Abu Dhabi Investment Authority, State Administration of Foreign (China), and Government of Singapore Investment Corporation. The three funds hold assets worth $829 billion, $817 billion, and $744 billion, respectively.

Commenting on the findings, Edith Reads from financepr.com said:  “The last few years have seen an increase in the assets managed by sovereign funds. More SWFs keep coming up by the day, and we can expect the global total managed assets to also increase. What’s interesting, however, is the recent trend of these SWFs putting their money in alternative investments, such as real estate, infrastructure, private equity and hedge funds.”

Even as more SWFs explore investments outside equity, the NBIM fund seems rooted in its ways. Of the $1.33B worth of assets under management, the fund only allocates 3% of this to alternative investments. As of 2021, the fund’s assets spread over equity, fixed income, real estate, and renewable energy infrastructure, with the first two taking the biggest shares.

SWFs have been around since the ’50s, following the formation of the Kuwait Investment Office in 1953. These funds allow nations to channel their capital into different investments that accrue profits and help stabilize the economy through asset diversification in bonds, equities, and other investments.

Countries may have different reasons for opening SWFs, the report said, noting that Countries with surplus funds, for example, may opt for an SWF to hedge the funds against inflation. – TradeArabia News Service




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