After the crisis, sovereign wealth funds are turning more to China and the United States than to Europe

Posted on Jul 12, 2021 at 7:01 amUpdated on Jul 12, 2021, 7:05 AM

Sovereign wealth funds have withstood the Covid-19 crisis well, with a return of 7.3% in 2020 comparable to that of the previous year (7.6%), according to the Invesco report, which relies based on a survey conducted in the first quarter of 82 funds. The largest of them, that of Norway, recorded a return of 10.9%, a gain of 100 billion euros. Between 2016 and 2019, sovereign wealth funds gained between 4% and 9.4%. They approached 2020 cautiously in the face of high levels of stock market assets, which allowed them to limit the damage when the crisis hit.

State investment funds took advantage of the fall in stocks during the global pandemic to buy stocks. The share of these assets in their capital rose from 26% to 28%. Unlike the 2008 crisis, funds stayed away from the banking sector and seized purchasing opportunities in other sectors (technology, health and pharmaceuticals, video games, etc.). In 2020, they carried out 280 significant shareholdings for a total amount of 84 billion dollars, down by a third compared to 2019, according to data from “Global SWF”. Funds like Singaporean Temasek, Mubadala in Abu Dhabi and Saudi Arabian PIF fund under Mohammed bin Salman have been particularly active.

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