Asset Class Coverage
Although we consider all the funds listed to be SWFs not all of them will feature in our data. We have focused our data on direct equity investments in both public (listed) and private (unlisted) markets. Many of the institutions included in our list either have an investment mandate or liability profile that prevent them from investing in equity instruments or require them to use external investment managers.1
We do not include external investment mandates in our data. The information on these allocations varies too widely to be meaningful and many contracts with external managers are covered by client confidentiality clauses.
By recording their direct equity investments, we aim to study SWFs’ strategic investments and partnerships and capture the nuances of how SWFs structure investments. Consequently, we do not include small open-market transactions that appear to be undertaken as part of a passive equity strategy executed by internal management teams.
We do record the acquisition of convertible securities. However, we record when they were bought, not when they were exercised as several conversion dates maybe included in a single transaction.
In private-market investments we are careful to consider any debt facilities used by sovereign wealth funds to finance their acquisition. This is particularly important in real estate, for example, where the use of mortgages and the issuing for mortgage-backed securities is common practice. As a result, we only record the initial equity portion of the investment, rather than the top-line value of the asset. This means that the hard currency amount we record for each investment may be lower than the volumes suggested by other providers of information about SWF activity.
In the case of joint ventures or consortium acquisitions where the total amount is disclosed, but individual contributions are not, we estimate the value by taking into consideration the number of investors, financing and typical investment behaviour by the fund in question. For example, several sovereign wealth funds disclose that they do not take stakes over a certain percentage of the equity of a company, so this is an integral part of assessing the size of the investment.