São Paulo – Direct acquisitions by sovereign funds worldwide reached an all-time high at US$ 174.73 billion last year, according to a survey conducted by the Sovereign Wealth Fund Institute (SWFI). Out of the ten funds that spent the most on buying other companies and assets in 2013, four are based in Arab countries located in the Gulf.
Among the Arabs, according to the SWFI, the Abu Dhabi Investment Authority (Adia), from the United Arab Emirates, invested the most last year, at US$ 7.93 billion, followed by the Norges Bank Investment Management, which manages the Norway Government Pension Fund, by Tamasek Holdings, and by GIC Private Limited, the latter two being from Singapore.
As per the survey, Adia took the lead as a result of acquisitions in Europe and Asia. The SWFI added that the fund has boosted its hiring program and had more European personnel, allowing it to seek out more direct deals, i.e. free from intermediaries. Apart from acquiring companies, Adia took part in more initial public offers.
The other Arab funds on the 2013 top ten list are the Kuwait Investment Authority, at US$ 6.36 billion; the Abu Dhabi Investment Council, which is Adia’s sister organization, at US$ US$ 3.97 billion; and the Qatar Investment Authority, at US$ 2.65 billion.
Generally speaking, the SWFI believes the record-high sum invested in 2013 reflects the growth of assets held by these funds, the maturing of domestic operations in larger-sized organizations, and growing confidence from these state-owned investors in the world economy.
According to the survey, the funds have diversified their strategies over the past few years, and are now investing in a wide range of assets, from industry to agriculture. To the SWFI, this underscores the importance of these organizations as “serious forms of long-term capital.”
The record in 2013 came in the wake of a decline from US$ 90.04 billion in 2011 to US$ 65.09 billion in 2012. It is worth highlighting, though, that the Norwegian fund was crucial to the result, since it invested US$ 124.71 billion, and was the “most active” fund last year, according to the SWFI.
*Translated by Gabriel Pomerancblum
