The boom in sovereign wealth funds could pay a happy dividend for external fund managers, with SWFs predicted to outsource 20 percent of their assets on average, according to a research report from Morgan Stanley’s Stephen Jen.

As always when talking about SWFs, the sums involved are vast: Of $700 billion in new funds that are set to come online from countries like Korea, Russia, Chile and Libya, some $150 billion may be outsourced if the estimate is correct. And the money will keep flowing — as assets under management grow, $200 billion may be placed with external managers every year for the next half-decade.

Jen extrapolates from the unusually transparent Government Pension Fund of Norway (GPF) and from Canada’s Daisse de depot et et Placement du Quebec, better known as CDQ.

“(W)e guess that 10-20% of the AUM (assets under management) may be farmed out by ‘mature’ SWFs, and even more by ‘young’ SWFs,” he said in his report.

External management may also let funds fly under the radar — especially valuable at a time when large SWF investments in U.S. financial companies are risking a political backlash.

“An added advantage - which applies to funds that prefer not to be transparent as Norway’s GPF is — is that farming out helps to cover up their footprints in the financial markets,” Jen said.