Sovereign Wealth Fund
The history of some sovereign funds dates back to 1953, as the first sovereign fund in the world was established by the State of Kuwait under the name of the Kuwait Investment Authority, but it has begun to be excessively active recently.
The sovereign wealth fund is owned by a state and is not affiliated with the Ministry of Finance or the Central Bank.
From assets such as (land, shares, bonds) or other investment tools, these funds manage a country’s surplus for investment.
Contrary to what some believe that these funds are an exclusive phenomenon of the royal families, several countries around the world have similar funds, including Norway, which has one of the largest funds around the world, as well as Singapore, China and Russia have similar funds of great weight.
Oil revenues are the main source of funds for the largest sovereign investment funds in the world, and in conjunction with the rise in oil prices and the increase in imports of raw materials-producing countries, the wealth of these funds has increased, and foreign cash reserves are also a major source.
Most experts believe that the emergence of these funds and their global role is a positive indicator in the world of financial markets. These funds rushed to inject money into the structure of the American economy, while most investors fled the American market due to fears associated with the possibility of that economy being exposed to recession and deflation.
The largest sovereign funds in the world in order until October-2021:
The Government Pension Fund (Norway) has assets of 1339.28 billion dollars.
China Investment Corporation (China) assets size 1222.31 billion dollars.
The General Investment Authority (Kuwait) has assets of 692.90 billion dollars.
The Abu Dhabi Investment Authority (UAE) has assets of 649.18 billion dollars.
Most countries do not disclose the size, activity, or returns of their sovereign fund investments, and because of this secrecy in the activity of sovereign funds, some countries express concern about the possibility that the countries that own the funds will exercise their political influence over the companies they acquire and thus hold the joints of the economic decision in them.