It is important to strike the right balance between debt repayments, SWF
investments abroad, and domestic spending through the budget.
The investments made through the SWFs
are effectively a way for those countries to diversify and become less reliant on a single stream of income.
The bigger the fund or SWF
gets, the harder it is to find growth and return opportunities, even with Norway's SWF
owning 1 per cent of all stocks worldwide.
Third, the application of a high discount rate-justified by Tanzania's severe poverty situation-would likely show that the accumulated capital in the SWF
after ten years of $2,5 billion plus the accumulated returns might in NPV terms be lower than the accumulated sums that have been withheld from current spending.
Rumours that much of the money for Egypt's SWF
will ultimately be sourced from the Gulf have also led to questions about the repercussions for the country's economic independence.
While the UK and US each accounted for around 16 per cent of the $800 billion invested by SWFs
since 2007, in relation to the size of its economy, the UK attracted over five times more investment than the US.
1) capital in transit: SWF
, particularly those involved in infrastructural or real estate investment projects, often operate through special purpose entities (SPEs), which complicates the identification of their beneficial ownership or accurate and timely portfolio compositions,
In addition, more than half of the airfreight sent through JFK is carried in the belly cargo holds of passenger jets, which would be even less likely to transfer their flights to the spacious but less-convenient SWF
, a former military facility.
It was set up in 1990 and at the end of June this year it held $889bn in assets, making it the biggest SWF
in the world, just ahead of the Abu Dhabi Investment Authority.
Although there is no universally accepted definition of an SWF
Upper-end estimates indicate total SWF
assets of around $5tn.
Vikas Papriwal, Partner and Head of SWF
& Private Equity UAE and Oman at KPMG investigates the apparent paradigm shift towards local markets