Sovereign Wealth Fund Investment Patterns and Performance
| dc.creator | Bortolotti, Bernardo | |
| dc.creator | Fotak, Veljko | |
| dc.creator | Megginson, William | |
| dc.creator | Miracky, William | |
| dc.date | 2017-04-01T14:00:06Z | |
| dc.date.accessioned | 2026-07-09T04:47:00Z | |
| dc.description | This study describes the newly created Monitor-FEEM Sovereign Wealth Fund Database and discusses the investment patterns and performance of 1,216 individual investments, worth over $357 billion, made by 35 sovereign wealth funds (SWFs) between January 1986 and September 2008. Approximately half of the investments we document occur after June 2005, reflecting a recent surge of SWF activity. We document large SWF investments in listed and unlisted equity, real estate, and private equity funds, with the bulk of investments being targeted in cross-border acquisitions of sizeable but non-controlling stakes in operating companies and commercial properties. The average (median) SWF investment is a $441 million ($55 million) acquisition of a 42.3% (26.2%) stake in an unlisted company; the most active SWFs originate from Singapore or the United Arab Emirates. Almost one-third (30.9%) of the number, and over half of the value (54.6%) of SWF investments are directed toward financial firms. The vast majority of SWF investments involve privately-negotiated purchases of ownership stakes in underperforming firms. We perform event study analysis using a sample of 235 SWF acquisitions of equity stakes in publicly traded companies around the world, and document a significantly positive mean abnormal return of about 0.9% around the announcement date. However, one-year matched-firm abnormal returns of SWFs average -15.49%, suggesting equity acquisitions by SWFs are followed by deteriorating firm performance. In cross sectional analysis, we find weak evidence of benefits associated with a monitoring role of SWFs and evidence consistent with agency costs created by conflicts of interest between SWFs and minority shareholder. SWFs have collectively lost over $57billion on their holdings of listed stock investments alone through March 2009. | |
| dc.identifier | doi:10.22004/ag.econ.50407 | |
| dc.identifier | https://ageconsearch.umn.edu/record/50407/files/22-09.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/50407 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/554807 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/50407 | |
| dc.title | Sovereign Wealth Fund Investment Patterns and Performance | |
| dc.type | Text |