Arab sovereign wealth funds

ENAR

The past months have witnessed an intensive debate about the relevance of SWFs in the global economic system and their role in global financial markets. Global Insight, the research firm, states that SWFs have grown a remarkable 24% annually in the past five years. Morgan Stanley, the investment bank, argued that the total size of the SWFs could increase from $3 trillion to $12 trillion by 2015. Commentators have tried to put these stunning figures into perspective. Robert Kimmitt, Deputy Secretary of the U.S. Treasury, argues that if one wants SWFs to appear large then one would argue that hedge funds manage an estimated $1.5 trillion and that the current market capitalization of the S&P 500 is roughly $12 trillion. On the other hand $12 trillion is only a fraction of the estimated $190 trillion in total global financial assets. Assets managed by mature-market institutional investors (such as pension funds