2008: Year of the Sovereign Wealth Fund
Posted by AJ on January 1, 2008
Not many would dispute that 2007 was the year of the credit crunch. The fallout from this past summer’s liquidity crisis put the phrase “Sovereign Wealth Fund” front and center on the global financial stage. In the 2nd half of 2007 alone, Sovereign Wealth Funds invested over $40 billion taking stakes in Citigroup, Morgan Stanley, Merrill Lynch, UBS, Bear Stearns, Barclays, HSBC, Blackstone, and China Development Bank.
You don’t have to go out on too big of a limb to predict that the table has been set for 2008 to be the year of the Sovereign Wealth Fund (SWF). Market volatility from recessionary risks in the US and the continued fallout from the US subprime mortgage crisis should present many attractive opportunities for those with the means to buy in 2008. With an estimated $3 trillion in assets currently under management, expected to grow to $13 trillion in the next decade as SWF countries benefit from record high natural resource prices and record export surpluses, SWFs should have plenty of excess liquidity in 2008 and beyond.
