Sovereign wealth fund’s AUM at $6 trillion at end- March 2015

London (Capital Markets in Africa):- The 2015 Preqin Sovereign Wealth Fund Review reveals that majority of sovereign wealth funds globally have increased their assets under management over the course of 2014. The growth in assets, up from USD5.38tn in October 2013 to USD6.31tn in March 2015, has been driven by continued funding from governments and reserves, as well as from investment returns. This growth has also been in the headwind of falling oil prices, one of the main sources of funding for these institutions.

It noted that SWF’s assets rose by more than $900bn in 2014 despite the drop in the global prices of oil and other commodities. It attributed the increase in AUM to continued funding from governments, as well as to the high returns provided by such investments in the context of a low interest rate environment. It said that only one new SWF was formed in 2014, but it noted that new SWFs are in the pipeline, such as a third SWF for Hong Kong.

Preqin said that AUM in 59% of SWFs rose between the end of 2013 and the end of March 2015, while AUM in 29% of SWFs remained unchanged during the covered period. It noted that AUM in 12% of SWFs decreased, with half of them deriving their capital from hydrocarbons. It pointed out that falling global oil prices in the second half of 2014 have led to significant withdrawals from some SWFs by governments that are highly funded by such assets, in order to counter the impact of lower oil prices on their economies and to fill funding gaps.

Further, Preqin said that 86% of SWFs invested in fixed income in 2014, while 81% invested in public equities, 60% in infrastructure, 59% in real estate, 47%
in private equity, 33% in hedge funds and 24% in private debt.

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