Updated Thursday, July 31, 2014 as of 11:43 PM ET
Portfolio - Alternative Investments
Sovereign Funds Boosting Alternative Investments, Invesco Says
by: Arif Sharif
Monday, September 30, 2013
Print
Email
Reprints

Bloomberg -- Sovereign wealth funds, which control about $6 trillion of wealth globally, are boosting investments in alternative assets like real estate and private equity to boost returns, a survey by Invesco Ltd. found.

The wide swings in equity prices and the “market-wide dissatisfaction with risk-return profile of equity investing,” together with low interest rates on fixed-income products, has pushed government-controlled funds to consider alternative assets to enhance growth, Invesco said in a report released in Dubai today. Alternative investments include international and local private equity, real-estate, hedge funds, infrastructure and commodities, according to the report.

Alternative investments made up 21 percent of the total assets of sovereign wealth funds in the west and these assets rose 26 percent in value over the last 12 months. The 29 surveyed funds, which controlled about 80 percent of global sovereign wealth fund assets, expected average annual returns of 8 percent from alternative assets, compared with 7 percent from equities, 4 percent from bonds and 2 percent from cash.

“There is also an increasing trend of direct investment in private equity rather than through third party funds,” Nick Tolchard, Invesco’s managing director for sovereign investors, told a news conference today. Middle East sovereign funds including the Abu Dhabi Investment Authority and the Kuwait Investment Authority held about $2 trillion in assets, he said.

Invesco had $705.6 billion of assets under management at the end of June. Its second-quarter profit rose 32 percent to $202.6 million as equity market gains boosted assets.

Get access to this article and thousands more...

All On Wall Street articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Lists
2014 Summer Reading List for Advisors

Current Issue

The June Issue is now online!


TWITTER
FACEBOOK
LINKEDIN

Industry Events

August 10, 2014 |

September 9, 2014 |

September 17, 2014 |

September 20, 2014 |

September 28, 2014 |

Already a subscriber? Log in here