TY - JOUR T1 - Sovereign Wealth Funds, Private Equity Funds, and Financial Markets JF - The Journal of Private Equity SP - 12 LP - 27 DO - 10.3905/jpe.2008.710902 VL - 11 IS - 4 AU - Arjun Sethi Y1 - 2008/08/31 UR - https://pm-research.com/content/11/4/12.abstract N2 - Because of high oil prices and global macroeconomic imbalances in trade, some nations have developed sovereign wealth funds (SWF) to invest excess foreign currency reserves in global financial markets. The aggregate value of SWFs is estimated at $2.5 trillion, which is more than twice the value of global private equity funds. The value of SWFs could grow to $12 trillion by 2015 because of continued inflows of foreign currency reserves. Because of the lack of transparency among SWFs, regulators in major financial markets are increasingly concerned the funds will be managed to achieve political rather than financial objectives. The trend in SWF investing is towards the purchase of large minority stakes in major global firms, which may be a prelude to leveraged buyouts of the firms. By 2015, the value of SWFs would surpass the value of the 20 largest global firms, increasing the possibility that SWFs could be a disruptive force in financial markets.TOPICS: Private equity, exchanges/markets/clearinghouses, financial crises and financial market history, developed ER -