Sovereign Wealth Fund

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Sovereign Wealth Fund (SWF)

Funds owned by sovereign nations that invest the savings of an entire state, foreign exchange reserves, or excess liquidity.

Sovereign Wealth Fund

A government-owned company that invests that government's excess reserves. That is, if a country has a current account surplus or a positive balance of trade the government may deposit the excess funds into a sovereign wealth fund. The funds are invested in securities, companies, or projects in order to increase the government's net worth. Often a sovereign wealth fund pays for a government's social programs such as welfare or a state pension. The funds in a sovereign wealth fund are kept separate from the country's regular currency reserves. Sovereign wealth funds are common in oil-rich countries where the government owns a significant portion of the oil production facilities.

Sovereign wealth fund (SWF).

A sovereign wealth fund (SWF) is a government-owned enterprise that invests a portion of its country's foreign-exchange reserves in global financial markets.

These reserves consist of a balance of payments surplus, also called a current account surplus, that are created because the payments received in overseas currencies for the country's exports, such as natural resources or manufactured goods, exceed what its residents are paying for imports.

Unlike the traditional overseas investments that governments make to ensure liquidity, such as the purchase of US Treasury securities, SWF assets are separate from official reserves and are typically invested in the private sector to produce higher returns.

SWFs are controversial, in part because their investment strategies, portfolio holdings, and returns are generally secret and in part because of the concern that the sponsoring countries could exert substantial economic pressure on the companies and countries where they invest.

References in periodicals archive ?
Debate about the political role of sovereign wealth funds subsided with the adoption of the Santiago Principles.
Indeed, the Norwegian model, with its focus on transparency and accountability, clear divisions of roles and responsibilities, operational independence in the fund's management, and its conservative approach of going through its central bank, appears to be the type of sovereign wealth fund preferred by Lebanon, as the nascent oil-producing country lays the initial groundwork for a potential new national financial institution and untapped resource.
A government may suddenly need to dip into the sovereign wealth fund, if oil prices drop for example, and precipitate a sell-off of shares.
Leading GCC sovereign wealth funds will also be represented, including by Mahmood Hashim Al Kooheji - CEO, Bahrain Mumtalakat Holding Company and HE Khaldoon Al Mubarak -- Group Chief Executive and Managing Director, Mubadala Investment Company.
So, in this case, Singapore created a new company, through an investment by one of its sovereign wealth funds, to help achieve a national goal.
Though Adia does not disclose the amount of money it manages, the Sovereign Wealth Fund Institute estimates its assets under management at approximately $770 billion, making it the second biggest SWF in the world after Norway's Government Pension Fund.
The sovereign wealth fund had a market value of 7,019 billion kroner (824 billion U.
It can often take a coupleof years for a sovereign wealth fund to materialise after the initial announcement.
Sovereign wealth fund (SWF) CEOs and French Economy Minister Emmanuel Macron attended the dinner.
It doesn't disclose the value of its assets under management but it is estimated to hold around $773 billion by the Sovereign Wealth Fund Institute.
You came to head the sovereign wealth fund after a long career abroad.
The Swiss lender has advised Qatar's sovereign wealth fund on high-profile deals including stake purchases in German automaker Porsche and the acquisition of London's Harrods department store.