Sovereign Wealth Funds & Co.

Note: This article is 4 months old. A lot of facts alarming then are commonplace today.

I’m not sure how many would be alarmed if I claimed the $45 dollar entry fee at Madame Tussauds ends up with the Dubai Government?  Well, it does actually. Or if I said that a chunk of your monthly Citibank creditcard payment, regardless of whether you’re in Shanghai or New York, actually finds its way back to…umm…Dubai?  Or that a brand as unlinked to the Middle East as Sony is actually grossing Dubai a share of its net profit?  I suspect I’d have some cynics.

You are not alone. For nobody at Wall Street had ever heard of Dubai less than three years ago. To say times have changed, is an understatement. Today, as Andrew Nichol recently revelead in an article, the hot shot analyst in downtown New York talks about little else.

Move over Private Equity, big brother has arrived.

According to this generation’s staple dictionary–Wikipedia–an ‘SWF’ is explained as quoted hereunder.

A sovereign wealth fund (SWF) is a state-owned fund composed of financial assets such as stocks, bonds, property or other financial instruments. Some sovereign wealth funds are held solely by central banks, who accumulate the funds in the course of their fiscal management of a nation’s banking system; this type of funds is usually of major economic and fiscal importance.

The usual suspects on the world’s top Sovereign Wealth Funds have some interesting listings. Abu Dhabi leads the world’s pack with almost a trillion dollars in assets. Not bad for a speck of dust on the world map. China, Singapore and Saudi Arabia are certainly not head-turning discoveries. Consequently, the United States not even make it to the world’s top 10, is. The little kingdom of Dubai makes it at a not too shabby number 19.

Retracing observations, I wonder how many notice that whilst the world’s wealthiest nations find themselves enlisted, carefully nestled ‘cities’ show up inconspicuously disguised and often mistaken, as countries! Namely, Abu Dhabi (at almost a trillion dollars in asset base) and Dubai, both tiny cities in an oh-so-tiny country.

Country	Fund	Assets $Billion	Inception	Origin	Approx wealth per citizen
Abu Dhabi	ADIA Abu Dhabi Investment Authority	$875[6]	1976	Oil	$1,000,000
Norway	GPF The Government Pension Fund of Norway	$350[7]	1990	Oil	$74,500
Singapore	GIC Government of Singapore Investment Corporation	$330[8]	1981	Non-commodity	$100,000
Saudi Arabia	Various	$300	n/a	Oil	$15,000
Kuwait	KIA Kuwait Investment Authority	$250	1953	Oil	$80,000
China	CIC China Investment Corporation	$200[9]	2007.09.28	Non-commodity	$151
Singapore	Temasek Holdings1	$159.2[8]	1974	Non-commodity	$35,400
Russia	SFRF Stabilization Fund of the Russian Federation	$157[10]	2004.01.01	Oil	$1,180
Australia	FFMA Australian Government Future Fund	$61.3[11]	2004	Non-commodity	$2,900
Qatar	QIA Qatar Investment Authority	$50[12]	2000	Oil	$250,000

The Ungrateful Wallstreeters

Until recently, the barrage of “kandorah” clad sophisticated investment funds were considered second-grade. Not hard to imagine a time when the Senate would rule by default against state-wide investment of a P&O for example. Times have changed. Oil prices, sophisticated urban development, and track-records are all criteria in favor or rather than against Middle East’s investment powerhouses.

What’s next in Dubailand? Wallstreet City. You never know.

This entry was written by Danish Farhan, posted on at 7:45 pm, filed under Observatory and tagged citigroup, dubai, isthithmar, madame tussauds, mubadala, sovereign wealth fund. Bookmark the permalink. Follow any comments here with the RSS feed for this post.