It was a nail-biting year for
sovereign wealth funds (SWFs) in 2009. With the price of oil,
currency movements, and exposure to financials and real estate
to worry about, many funds were in a state of paralysis in the
first half of the year. Only $3.5 billion was invested between
April and June as equity markets rallied, the lowest quarterly
level since the last three months of 2004.
Even those funds that were active
displayed more caution and sought safety in numbers on big
deals. Collaboration between sovereign wealth funds in order to
spread the risk of investments had not been seen before
In 2009 a lot less leverage was available even for
acquisitions of distressed assets. Although some funds such as
the Kuwait Investment Authority and Abu Dhabi Investment
Authority do not use leverage to increase investment returns,
others that do, such as the Qatar Investment Authority,...