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UAE sovereign fund tops global ranking: SWF Institute While state-owned funds in Middle East account for more than third of world total, they score considerably lower in terms of transparency
The US-based Sovereign Wealth Fund (SWF) Institute has released its latest rankings for state-owned investment funds worldwide, with funds in the UAE, China, Norway and Saudi Arabia occupying the top four places. The Abu Dhabi Investment Authority fund came in first in terms of size at $627 billion. The fund holds a sizeable stake in Egypt's EFG-Hermes, one of the largest investment banks in the Middle East. Its holdings also include real estate, private equity and hotels. The majority of its investments are in North America, followed by Europe. The fund's managing director is Sheikh Hamed bin Zayed Al-Nahyan, the son of the late ruler and founder of the UAE. He is half-brother of the current UAE president. China's SAFE Investment Company came in second at $568 billion. Over one third of the world total of state investment funding can be found in the Middle East, with funds from the UAE, Saudi Arabia, Kuwait, Qatar, Libya and Algeria all occupying places within the top 20. By the end of 2011, some 60 per cent of total sovereign investment funding, which amounts to some $4.8 trillion worldwide, was driven by oil and gas revenues. The SWF index also provides ratings for fund transparency. In general, Middle Eastern funds have lower ratings in this regard than their European and North American counterparts. The Abu Dhabi Investment Authority fund, for example, has a transparency index score of 4 out of 10, while Norway's Government Pension Fund – ranked 3rd worldwide –scored 10 out of 10. Sovereign wealth funds are pools of money derived from a country's foreign-currency reserves that are invested in stocks, bonds, property and precious metals. Some countries, especially the oil-rich states of the Gulf, set up sovereign funds with the aim of diversifying their revenue streams. Following are the top-20 SWF rankings: Rank Country Fund Name Assets ($billion) Inception Origin Linaburg-Maduell Transparency Index 1 UAE-Abu Dhabi Abu Dhabi Investment Authority $627 1976 Oil 4 2 China SAFE Investment Company $567.9** 1997 Non-Commodity 2 3 Norway Government Pension Fund – Global $560 1990 Oil 10 4 Saudi Arabia SAMA Foreign Holdings $472.5 n/a Oil 4 5 China China Investment Corporation $409.6 2007 Non-Commodity 7 6 Kuwait Kuwait Investment Authority $296 1953 Oil 6 7 China – Hong Kong Hong Kong Monetary Authority Investment Portfolio $293.3 1993 Non-Commodity 8 8 Singapore Government of Singapore Investment Corporation $247.5 1981 Non-Commodity 6 9 Singapore Temasek Holdings $157.2 1974 Non-Commodity 10 10 Russia National Welfare Fund $149.7* 2008 Oil 5 11 China National Social Security Fund $134.5 2000 Non-Commodity 5 12 Qatar Qatar Investment Authority $85 2005 Oil 5 13 Australia Australian Future Fund $73 2004 Non-Commodity 10 14 UAE – Dubai Investment Corporation of Dubai $70 2006 Oil 4 15 Libya Libyan Investment Authority $65 2006 Oil 2 16 UAE-Abu Dhabi International Petroleum Investment Company $58 1984 Oil 3 17 Algeria Revenue Regulation Fund $56.7 2000 Oil 1 18 South Korea Korea Investment Corporation $43 2005 Non-Commodity 9 19 US-Alaska Alaska Permanent Fund $40.3 1976 Oil 10 20 Kazakhstan Kazakhstan National Fund $38.6 2000 Oil 6 *This includes the oil stabilization fund of Russia. **This number is a best guess estimation. Source: SWF Institute, February 2012 http://english.ahram.org.eg/News/33983.aspx
