Sovereign wealth funds: The new rulers of finance

State-owned, cash-rich and increasingly influential, sovereign wealth funds have emerged as the most controversial players in the financial markets. All the constituents – banks, private equity, corporates, hedge funds – want a slice of their action. Just how powerful will the funds become? Sudip Roy reports.

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SOVEREIGN WEALTH FUNDS are reshaping the financial markets. Although the estimated $2 trillion of assets that they manage is small beer compared with the $53 trillion that mature-market institutional investors oversee, the speed at which the state-owned funds are accumulating assets is astonishing. Powered by high commodity prices and surging foreign exchange reserves, they will grow by $1.2 trillion a year to reach $7.9

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