Sovereign wealth funds bet on alternative assets for growth- survey
A survey by investment management services firm Invesco Ltd revealed that sovereign wealth funds were putting money in alternative assets to improve their returns. According to the report released in Dubai, the alternative assets that government- controlled funds were investing in included real estate, international and local private equity, infrastructure and commodities and hedge funds.
These alternative investments comprised 21% of the assets of western sovereign wealth funds. The survey also found that the assets had increased 26% in value in the past 12 months. The funds also expected an annual 8% return from these investments compared to the 7% return they expected from equities, 4% from bonds and 2% from cash. There were 29 funds included in the survey. According to Invesco, these funds controlled 80% of sovereign wealth fund assets worldwide.
In a news conference, Invesco's Managing Director for Sovereign Investors Nick Tolchard said, "There is also an increasing trend of direct investment in private equity rather than through third party funds."