Insights from sovereign investor 5-year study

Article | 28 October 2017 | Invesco

 

Since 2013, we’ve conducted over 320 interviews with sovereign investors around the world. Our 5-year anniversary review features key insights and considers what the future may hold.

Each year, the Invesco Global Sovereign Asset Management Industry Study seeks to better understand the investment objectives and behaviours of sovereign investors.

Through conversations with leading sovereign wealth funds, state pension funds and central banks, we’ve noted a number of factors influencing sovereigns over the past five years, such as low interest rates, the falling oil price and reduced funding.

This special 5-year anniversary review looks at:

Key numbers

While relatively small in number compared to pension funds, sovereign investors are a large category in asset terms, and by 2022 we forecast that they will account for over an estimated US$14 trillion of investments. Distinct segments make sovereigns a diverse set of asset owners with their own evolutionary path and different needs to other institutions.

Evolution as investors

As a category, sovereigns control a highly diverse portfolio, although certain segments, particularly liquidity and development sovereigns, have more restricted profiles. Across the past five years of the sovereign study, the key investment theme has been the swapping of fixed income exposure for higher allocations to a range of alternative investments.

Evolution as institutions

Sovereign investors are organisations, not just portfolios, and are on a journey of capability development across both investment and business disciplines. Those capabilities will be critical to dealing with the challenges of growing scale and successfully maintaining a valued role into the future.

Read the sovereign investor 5-year review

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Important information

This document is for information purposes only and is not an offering. It is not intended for and should not be distributed to, or relied upon by members of the public. Circulation, disclosure, or dissemination of all or any part of this material to any unauthorised persons is prohibited.

The opinions expressed are current as of the date of this publication, are subject to change without notice and may differ from other Invesco investment professionals.

The document contains general information only and does not take into account individual objectives, taxation position or financial needs. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor.

This is not an invitation to subscribe for shares in a fund nor is it to be construed as an offer to buy or sell any financial instruments. While great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon.