News

SWFs to turn to alternatives: PwC

Sovereign-wealth-fundsAlternative investments now make up almost a quarter (23%) of all sovereign wealth funds (SWFs) asset allocations, according to a report from PwC. The report, The rising attractiveness of alternative asset classes for Sovereign Wealth Funds, finds that SWFs have broadened their investment strategies since 2014 due to the pressure felt from falling oil prices as well reduced yields in traditional asset classes like fixed income. This has resulted in an increasing allocation to private equity, real estate, gold and infrastructure. The trend is particularly observable in the Middle East which is home to some of the largest SWFs, many of which were affected by the collapse of oil prices in 2014  - the liquidation of SWFs holdings in Qatar and Saudi Arabia were instrumental in stabilising their respective economies. Globally, assets have continued to rise in the SWF sector, albeit at a slower pace than in previous years. And with oil prices expected to rise again due to lower production levels, PwC expects the investment in alternatives to continue as SWFs look for increased diversification, principal protection, better performance and a hedge against inflation. However, the report also warns that the risk of illiquidity, complexity and cyclicality means that “finding the right allocation is crucial” as is the need for continuous portfolio monitoring and reallocation to reflect economic developments. ©2018 funds global mena

Sponsored Profiles

There’s no doubt that Africa has been seen increasingly as an attractive prospect for inbound investment in recent years, with investors seeing real potential in the continent, particularly in the private equity, infrastructure and real estate asset classes, as it experiences strong economic growth.

Plausible explanations exist for why low-volatility stocks perform better than their high-volatility counterparts.

Aberdeen Asset Management has set up its first Middle East office in the newly established Abu Dhabi Global Market. Andrew Paul, senior executive officer, explains why.

A recent sovereign bond issue from Saudi Arabia underlines the appeal of emerging market investing. What must investors consider when allocating to this asset class? Firas Mallah of BMO Global Asset Management shares his views.

Executive Interviews

INTERVIEW: ‘Financing is the blood of Iran’s economy’

Amid a fresh wave of American sanctions, Romil Patel spoke to Meysam Hamedi, director of financial markets and instruments at Iran’s Securities & Exchange Organization (SEO).

INTERVIEW: Totally mega

In 2016, global consulting firm PWC forecast the emergence of five global ‘megatrends’ in the next two decades. Stephen Anderson, its Middle East clients and markets leader, talks about their...

INTERVIEW: Protecting the investment

Rasmala’s trade finance fund recently passed $100 million in assets. Doug Bitcon, head of credit strategies, explains why he has to be hands-on.

EXECUTIVE INTERVIEW: A natural interest in the topic

Since 2016, Guillermo Ortiz has been a chairman of Latin America’s BTG Pactual. The former central banker of Mexico talks to Nick Fitzpatrick.

Roundtables

South Africa asset management roundtable: Global rebound on ice

Experts discuss the investment implications of the coronavirus pandemic, a delayed rebound in global growth and dealing with South Africa’s energy issues head on. Chaired by Romil Patel in Cape Town.

South African roundtable: Taking the bull by the horns

Our panel discusses Chinese investment in Africa, financial institutions’ contribution to economic sustainability and regulatory concerns. Chaired by Romil Patel in Cape Town.

ROUNDTABLE: Hooked to the global caravan

With the MENA region at a tipping point, our panellists talk about economic diversification, the impact of regulation and the delayed Saudi Aramco listing. Chaired by Romil Patel in Dubai.

MENA ROUNDTABLE: ‘The story is about reforms’

Our cross-industry panel discuss the positive backdrop in Egypt, the Dana Gas controversy and the potential index upgrades of Saudi Arabia and Kuwait. Chaired by George Mitton in Dubai.