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SWF Investment Strategies Draft V1

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Introduction:
Central question: What’s this paper about?
This paper attempts to assess the nature of sovereign wealth funds’ investment strategies by replicating
Shia’s research using Bloomberg M&A data on the same list of SWFs, and extending it to a set of
selected peer groups to those SWFs.
Key Point #1: What really is a SWF. SWF institute defines SWF as XXX. It is an investment vehicle used to
manage a windfall of income from trade or natural resources. The inception is to divert a country from
the fate of what’s known as “Dutch Disease”, where the short-term heavy income from non-industrial or
manufacturing sectors weakens a country’s comparative competitiveness compromising its long-term
potentials. As such, SWFs are by design intended to serve the interest of its home country. However, as
an investment fund, it also has the one central role of profit-maximizing. The constant struggle to serve
this dual goal is what garners the attention of academics and researchers alike to speculate their
investment tendencies.
Key Point #2: Why is sovereign wealth fund interesting and important to study?
- There is a very large growth in the unique number and asset under management
Sovereign wealth funds as an investor class is rapidly attaining substantial presence in the world. The
emergence is attributed to XXXX, and sine 2004 the number of unique funds has risen from XX to XX,
more than XXX% growth.
- There has been many SWF related controversies that has great implications on the geopolitical
intricacies of the world’s power dynamics
- There is an obvious investment theme and pattern that is unique to SWF
Key Point #3: Why do sovereign wealth funds exist
- Managing natural resources revenue to avoid “Dutch Disease”
- Both profit seeking and have an agenda pertaining to the national interest
Key Point #4 What are some of the challenges facing SWF, and facing the public analyzing SWF?
- Lack of data is a major barrier for the vast majority of analyzers
- Between the X number of SWF in EMEA which has XX% of total AUM amongst all SWF, only XX%
of their transaction deals
Key Point #5: Existing literature largely focus on describing the behaviour of SWF in an isolated way by
looking at the tendencies of their investment given a certain organizational variable or perhaps relating
to an abstraction of macro indicators. While using Bloomberg M&A database exclusively, I arrived at the
same conclusion as that of found by Shai et al for SWF. However, by intersecting transaction deal
behaviour of SWF against its peer investor class’ along with unique events surrounding the political
environment of the SWF’s, I was able to normalize some of the investor bias inherent in large funds and
found that of the same tendency is also displayed in the peer groups during the same period. As well,

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Introduction: Central question: What’s this paper about? This paper attempts to assess the nature of sovereign wealth funds’ investment strategies by replicating Shia’s research using Bloomberg M&A data on the same list of SWFs, and extending it to a set of selected peer groups to those SWFs. Key Point #1: What really is a SWF. SWF institute defines SWF as XXX. It is an investment vehicle used to manage a windfall of income from trade or natural resources. The inception is to divert a country from the fate of what’s known as “Dutch Disease”, where the short-term heavy income from ...
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