Sovereign Wealth Funds Slow Pace of PE Investment


June 1, 2012

In past years Preqin predicted that more sovereign institutions would begin allocating to alternatives and Preqin was right. There has been an increase in the proportion of institutions investing in alternative assets between 2009 and 2011.


In 2012, however, Preqin notes that there are indications that this process has slowed, with older institutions having already completed their return and newer institutions still in the early stages of considering their strategic allocations. It reports that the overall levels of capital flowing into alternatives from sovereign wealth funds “remain extremely significant”.


Preqin says that as new funds are launched and sovereign wealth fund plans are put into formation, it is clear that this group of investors will remain an important potential source of capital for investment managers worldwide. The above graphic shows that over half of sovereign wealth funds are known to invest in the private equity asset class. A further 11% gain exposure to private equity through direct investments. (Image source: Preqin SWF Report)

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