Sovereign Wealth Fund Investments: A Case Study Analysis

• Main Author: Bradshaw, David Lee
• Language: en
• Published: The University of Arizona. 2010
• Online Access: http://hdl.handle.net/10150/146076

Sovereign Wealth Funds are an emerging economic force in the world of finance that has spurred both excitement and worry over what they represent. Because SWFs are institutional investors in the form of government connected hedge funds, there is worry that SWFs could be using investment as a political weapon instead of for financial investment. Despite evidence that supports the idea that SWFs are long term investors which invest based on financial return, these fears persist. Through case study analyses of Dubai Ports World, Temasek Holdings Ltd., the Norwegian Government Pension Fund, and the Chilean SWFs, several points can be made that point to how to make SWF investment more acceptable to Western markets and world markets in general. Analysis of the cases found that SWF investment is more successful if SWFs are transparent in their strategy or philosophy of investment, and if SWFs and recipient of investment governments are willing to treat SWFs like private investors instead of as public or government related investors. Furthermore, this study finds that governments who benefit from investment from SWF investment should maintain an economic environment conducive to both domestic and foreign investment rather than use protectionist measures.