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Sovereign wealth funds in the post-pandemic era

Sovereign wealth funds (SWFs) have over $11.5 trillion in assets under management as of February 2023. Most of these 176 funds are sponsored by non-Western countries and their growth has made SWFs important international investors, particularly in private equity funding. We first define SWFs, then d...

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Detalles Bibliográficos
Autores principales: Megginson, William L., Malik, Asif I., Zhou, Xin Yue
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Palgrave Macmillan UK 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10092925/
http://dx.doi.org/10.1057/s42214-023-00155-2
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author Megginson, William L.
Malik, Asif I.
Zhou, Xin Yue
author_facet Megginson, William L.
Malik, Asif I.
Zhou, Xin Yue
author_sort Megginson, William L.
collection PubMed
description Sovereign wealth funds (SWFs) have over $11.5 trillion in assets under management as of February 2023. Most of these 176 funds are sponsored by non-Western countries and their growth has made SWFs important international investors, particularly in private equity funding. We first define SWFs, then discuss their evolution into today’s categories of stabilization, savings, and development/strategic funds. We discuss the documented importance of SWF funding sources – oil sales revenues versus excess reserves from export earnings – and summarize the empirical literature studying how SWFs allocate funds geographically and across asset classes. Next, we summarize empirical evidence on the impact of SWF stock investments on target firm financial and operating performance and discuss the evidence showing that the announcement of SWF investment causes target firm stock prices to rise in the short term, but the positive impact is significantly less than the positive return following large stock purchases by private investors, and the longer-term effect of SWF investment on target firms is generally negative. SWFs’ recent focus on promoting ESG policies of investee companies is assessed and briefly compared to the effectiveness of other institutional investors’ ESG efforts.
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spelling pubmed-100929252023-04-14 Sovereign wealth funds in the post-pandemic era Megginson, William L. Malik, Asif I. Zhou, Xin Yue J Int Bus Policy Perspective Sovereign wealth funds (SWFs) have over $11.5 trillion in assets under management as of February 2023. Most of these 176 funds are sponsored by non-Western countries and their growth has made SWFs important international investors, particularly in private equity funding. We first define SWFs, then discuss their evolution into today’s categories of stabilization, savings, and development/strategic funds. We discuss the documented importance of SWF funding sources – oil sales revenues versus excess reserves from export earnings – and summarize the empirical literature studying how SWFs allocate funds geographically and across asset classes. Next, we summarize empirical evidence on the impact of SWF stock investments on target firm financial and operating performance and discuss the evidence showing that the announcement of SWF investment causes target firm stock prices to rise in the short term, but the positive impact is significantly less than the positive return following large stock purchases by private investors, and the longer-term effect of SWF investment on target firms is generally negative. SWFs’ recent focus on promoting ESG policies of investee companies is assessed and briefly compared to the effectiveness of other institutional investors’ ESG efforts. Palgrave Macmillan UK 2023-04-12 /pmc/articles/PMC10092925/ http://dx.doi.org/10.1057/s42214-023-00155-2 Text en © Academy of International Business 2023, Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law. This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Perspective
Megginson, William L.
Malik, Asif I.
Zhou, Xin Yue
Sovereign wealth funds in the post-pandemic era
title Sovereign wealth funds in the post-pandemic era
title_full Sovereign wealth funds in the post-pandemic era
title_fullStr Sovereign wealth funds in the post-pandemic era
title_full_unstemmed Sovereign wealth funds in the post-pandemic era
title_short Sovereign wealth funds in the post-pandemic era
title_sort sovereign wealth funds in the post-pandemic era
topic Perspective
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10092925/
http://dx.doi.org/10.1057/s42214-023-00155-2
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