MacroScope

Sovereign wealth tie-ups

August 18, 2009

Sovereign wealth funds are increasingly working in concert to make joint strategic investments.

China, Singapore, Malaysia, Korea, Abu Dhabi and Kuwait are among those which have recently formed investment partnerships with each other.

Why are they doing this? First of all, by linking up capital and resouces, SWFs can leverage up, optimise local knowledge, spread risks and maximise returns.

An entity with diverse backgrounds can also enhance transparency, which could allay concerns among regulators and politicians who suspect SWF investments are politically driven.

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