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Four GCC SWFs among world’s top 10 with $7.4 trillion assets

Adia, The Investment Corporation of Dubai, Mubadala Investment Company, and ADQ included in the world's top 20 SWFs

The world’s top 10 sovereign wealth funds, including the big four from the GCC, manage assets worth $7.4 trillion out of the combined assets of $9.56 trillion held by 100 SWFS across the globe.

The world’s largest SWF, Norges Bank Investment Management (NBIM), the Norwegian Central Bank, handles assets worth $$1.33 trillion. According to the data presented by Financepr.com. NBIM 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 (Adia), State Administration of Foreign (China), and Government of Singapore Investment Corporation, Kuwait Investment Authority, Public investment Fund (Saudi Arabia) and Qatar Investment Authority.

Adia holds assets worth $829 billion, while China’sState Administration of Foreign has $817 billion, and Singapore Investment Corporation has $744 billion..

“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,” said Edith Reads from financepr.com,

Even as more SWFs explore investments outside equity, the Norway fund seems rooted in its ways. Of the $1.33 trillion worth of assets under management, the fund only allocates 3.0 per cent 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.

Some SWFs seem keener to include these alternative investments in their portfolios. The UAE seems open to the option of alternative investments. Four of the country’s SWFs appear on the top 20 largest funds list: Adia, The Investment Corporation of Dubai, Mubadala Investment Company, and ADQ. The funds allocate 25 per cent, 65 per cent, 48 per cent, and 58 per cent, respectively to alternative investments.

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 PIF manages assets worth $480 billion and allocates 56 per cent of this to alternative investments.

Other leading Arab SWFs include SAMA Foreign Holdings of Saudi Arabia, Libyan Investment Authority, Emirates Investment Authority, and State General Reserve Fund.

SWFs have been around since the 1950s, 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.

— issacjohn@khaleejtimes.com