09/03/2011 Author: Shannon Hawthorne

SWF assets reach $4trn mark

Total sovereign wealth fund (SWF) assets have risen by 11% from $3.5trn to $3.98trn over the past 12 month, according to a recent report by research firm Preqin. 

The increase, which marks the second consecutive year of SWF asset increases, comes as the government investment funds looks to increase allocations to alternatives. 

According to the report, entitled the 2011 Preqin Sovereign Wealth Fund Review, the proportion of SWFs investing in infrastructure has risen from 47% in 2010 to 61% at the beginning of 2011, while real estate and private equity have risen from 51% to 56% and from 55% to 59% respectively, over the same time period. 

However, the percentage of SWFs investing in hedge funds has remained relatively unchanged at around 36% (compared to 37% last year). 

“Following global economic stabilisation, many SWFs that had delayed plans to diversify their holdings as a result of the economic downturn have now resumed these plans,” said Sam Meakin, managing editor of the 2011 review. 

“Therefore we expect the proportion of SWFs moving into the various alternative asset classes, as well as the amount invested by SWFs in alternatives, to continue to increase in the coming year.”