How to Spend It – for sovereign wealth funds (2)
On our way to a meeting in London with a senior official of a sovereign wealth fund from an emerging market country, my colleague and I came across a van from a company called Sovereign Recovery.
How timely, we thought, given the billions of dollars emerging sovereigns have had to pour into local markets to revive their economies hit by sudden drainage of foreign capital by the credit crisis.
The company, of course, is not engaged in any of sovereign economic recovery work — they are motor engineers who have contracts with leading transport operators including Transport for London.
The official at the SWF, meanwhile, told us that government-owned wealth funds around the world are concentrating their efforts to help recover domestic economies at the time being, but they are a lot of deals close to being agreed — a sign that SWFs are gaining back appetite for investment.
But as many experts say, the days of chasing pure returns for their own sake is over and strategic investment in food, energy, transport, technology will set the trend in the next few years.
(Photo from Sovereign Recovery website)