What is a Sovereign Wealth Fund? (2024)

FAQs

What is a Sovereign Wealth Fund? ›

A sovereign wealth fund is a pool of assets that is run by a country's government, invested in assets to generate economic benefits for the citizens. For oil-rich countries like Norway, Kuwait, and Saudi Arabia, sovereign wealth funds represent an important source of government revenues and a tool for economic policy.

A sovereign wealth fund (SWF), or sovereign investment fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally.

government-owned funds that purchase private assets in foreign markets.

While the U.S. as a whole does not have a sovereign wealth fund, several of its states do. These funds, however, are nowhere near as big as the international ones listed above. The largest in the U.S. is the Alaska Permanent Fund Corporation, established in the early 1980s, which has roughly $67 billion in assets.

A sovereign wealth fund is a pool of assets that is run by a country's government, invested in assets to generate economic benefits for the citizens. For oil-rich countries like Norway, Kuwait, and Saudi Arabia, sovereign wealth funds represent an important source of government revenues and a tool for economic policy.

SWFs generally enjoy favorable tax treatment in the U.S., but this treatment is subject to specific limitations; SWFs typically require separate LPA provisions or side-letter protection to ensure that their favorable tax treatment is not thwarted by the activities of the funds in which they invest. US Tax Exemption.

Sovereign wealth funds (SWFs) have over $11.5 trillion in assets under management as of February 2023. Most of these 176 funds are sponsored by non-Western countries and their growth has made SWFs important international investors, particularly in private equity funding.

SWFs are usually established using balance of payments surpluses, official foreign currency reservoirs, proceeds of privatizations, government transfer payments, fiscal surpluses, and/or receipts from commodity exports.

A Sovereign Wealth Fund (SWF) is like a savings account but on a national level. It is a pool of money owned by a government. Revenues from natural resources or foreign exchange reserves typically fund it. SWFs are created to save and invest for the future.

Largest SWFs funds worldwide April 2024, by total assets

Despite not ranking among the largest global State-Owned Investors (SOIs), the Middle East was home to nine of the top 20 SWFs worldwide. The largest SWF was the Abu Dhabi Investment Authority, managing assets just shy of one trillion U.S. dollars.

Which country has the best sovereign wealth fund? ›

Norway is home to the biggest sovereign wealth fund globally, valued at nearly $1.4 trillion.

The fund was set up to shield the economy from ups and downs in oil revenue. It also serves as a financial reserve and as a long-term savings plan so that both current and future generations of Norway get to benefit from our oil wealth. In 1969, one of the world's largest offshore oilfields was discovered off Norway.

The world's largest sovereign wealth fund was established in the 1990s to invest the surplus revenues of Norway's oil and gas sector. To date, the fund has put money in more than 8,800 companies in over 70 countries around the world, making it one of the largest investors across the globe.

A Sovereign Wealth Fund (SWF) is like a savings account but on a national level. It is a pool of money owned by a government. Revenues from natural resources or foreign exchange reserves typically fund it. SWFs are created to save and invest for the future.