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Sovereign health

Tuesday 13 July 2010 - by Andrew Hickley


Parker also refuses to write off potential European investment, though he recognises that over the past year popularity of investments has shown a clear switch.

“The first theme is that there is a clear focus now, by the SWFs on emerging markets, and there’s a clear shift in investment strategy, away from developed economies into emerging markets.

“The European economy isn’t struggling, so long as you no longer look at Europe as one economy. We’ve got two economies. Southern Europe no doubt is struggling and struggling very badly. But we have economies like Germany and France which actually are surprisingly positive. What we have seen in recent weeks is an increase in investment exposure in particular to the German and French exporting companies by sovereign wealth fund managers.

“In terms of alternative investments, such as real estate, it’s variable. Qatar still has quite a strong commitment to buying real estate in the UK.”
But he acknowledges that real estate investment, previously a haven for SWFs, will be among the markets to dwindle.



Parker says: “I think that the previously seen focus on investing in hedge funds, infrastructure, alternatives, private equity and real estate, will focus more on private equity and infrastructure over the next few years.”
Professor Rose explains the impression he was given at the end of Senator Dodd’s analysis of SWFs in 2008.

“The tone was along the lines of ‘I really wish we did not have to take their money, but we have to. This is the position we are in, and it is a shame that it has come to this.’”


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