MacroScope

Tale of two SWFs

As the world moves closer to the end of the credit crisis, sovereign wealth funds around the world are experiencing mixed fortunes.

Good news comes from Singapore’s SWF Temasek, which springs back into gains with its portfolio climbing 32 percent between April to end-July after a 30 percent loss in the year to end-March.

Announcing its annual performance report (which should please the country’s taxidrivers), Temasek said it is open to investing in financials and resources in the long term and it has bought stakes in South Korea’s ENK, cylinder suppliers, and Brazil’s oilfield services firm San Antonio.

Moving towards the Middle East, Dubai World, a state-owned holding company, is struggling to restructure its subsidiaries.

It has moved several executives to its Istithmar unit, which owns struggling high-end retailer Barney’s New York, from its real estate unit Nakheel, which is trying to refinance $3.52 bln Islamic bonds maturing in December.

New power brokers of the world

It’s been a few years since oil exporters, Asian governments, hedge funds and private equity firms became the new power brokers of the world given their growing wealth in the global economy.

But there is no doubt that the credit crisis has halted the power brokers’ rapid ascent. According to a new report from McKinsey Global Institute, their collective assets posted no growth at the end of 2008 from the previous year, holding steady at $12 trillion.

However, they are expected to sharply boost their wealth in the next four years. The report expects foreign financial assets held by Asian sovereign investors and oil-exporting nations to more than double to $21.7 trillion by 2013 from the current $9.7 trillion.