Apr 23, 2018

Sovereign wealth funds grow in size and influence

Dan Primack, author of Pro Rata

Photo by Safin Hamed/AFP/Getty Images

Sovereign wealth funds now manage a whopping $7.45 trillion in assets, up 13% from last year, according to a new report from research firm Preqin.

Why it matters: State-backed investment funds have amassed an unprecedented amount of influence in global capital markets.

More data from the Preqin report:

  • Around $5.5 trillion is managed by just 10 SWFs.
  • 71% of SWFs have seen asset increases over the past year (up from 51% a year ago). Much of that rise can be attributed to the bull market for public equity.
  • 51% of the total capital is held by hydrocarbon-funded SWFs.
  • The top asset classes for SWFs are public equities (82%) and fixed income (78%).
  • 60% of SWFs invest in private equity. A notable exception remains Norway's GPFG, which also is the world's largest SWF with $1.06 trillion in AUM.
  • Only 35% invest in hedge funds, although that percentage has increased in each of the past two years.

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Dion Rabouin, author of Markets
14 mins ago - Economy & Business

Wall Street still prefers bonds

Illustration: Aïda Amer/Axios. Photo: Sunset Boulevard/Getty Contributor

Investors' return on U.S. corporate bonds has been falling since its August peak, but buying has only accelerated, especially in investment grade bonds that are offering historically low yields.

The state of play: Since hitting its 2020 high on Aug. 4, the benchmark Bloomberg Barclays U.S. bond aggregate has delivered a -2.2% return. (For comparison, the S&P 500 has gained 3.9% during the same time period.)

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Barak Ravid, author of from Tel Aviv
2 hours ago - World

U.S.-Israeli delegation secretly visits Sudan

Photo: Artur Widak/NurPhoto via Getty Images

A joint U.S.-Israeli delegation traveled secretly on Wednesday to Sudan for talks on a possible announcement on "ending the state of belligerence" between the countries that could be released in the next few days, sources briefed on the trip told me.

The big picture: President Trump announced earlier this week he is ready to remove Sudan from the U.S. state sponsors of terrorism list once Sudan pays $335 million in compensation to American terror victims.

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Felix Salmon, author of Capital
2 hours ago - Economy & Business

A white-collar crime crackdown

Illustration: Eniola Odetunde/Axios

America has waited a decade for an aggressive government crackdown on white-collar crime. Now, just before the election, and in the middle of a bull market, it has arrived.

Why it matters: When times are good, investors become more trusting and more greedy. That makes them more likely to put their money into fraudulent or criminal enterprises.

  • After a decade-long bull market, there is no shortage of those frauds to prosecute.
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