The recent, rapid rise of sovereign wealth funds (SWFs) has ignited controversy in many parts of the world. In OECD (Organisation for Economic Co-operation and Development) countries, many observers worry that SWFs could be instruments of state policy posing as investment vehicles. On the other side, representatives of nations with SWFs protest that their motives are purely financial, that the purpose of the funds is to increase national wealth, and that they wish to participate responsibly in the global financial system.

Although SWFs have been the subject of much public attention and recent research reports, most commentary and analysis considers the funds at an aggregated level and reaches similar observations and conclusions: that SWFs are targeting investments in OECD countries; that they wish to invest in politically sensitive sectors; that they prefer to acquire minority stakes; and that they are moving from conservative to higher-risk investments.

In our view, such conclusions — and the current debate itself — are not well informed by perspective on the actual behaviors of SWFs. Accordingly, Monitor Group launched an investigation into the funds, focusing on their behaviors and the responses of major constituencies around them.

This report is based on analysis of more than 1,100 publicly-reported SWF equity transactions between 1975 and March 2008, representing approximately $250 billion in value. Monitor researchers also interviewed a cross-section of fund managers, policy makers, investment professionals, and expert commentators and analysts.

Sovereign-Wealth Funds Seek Control (The Wall Street Journal)
New study adds nuance to sovereign fund debate (The National)
Fear of sovereign wealth funds 'overdone': report (AFP)

Temasek: The Model for China's Sovereign Wealth Fund? (BusinessWeek)
Summary of SWF Report (Financial Series, article in Chinese)

Sovereign Wealth Funds – Friend or Foe? (Banker Middle East)