Sovereign Wealth Funds: A differentiation of investment strategies
Isabell Claus
Vienna University of Economics and Business
Althanstrasse 51, 1090 Vienna
Phone: +43-1-31336-4376
Fax: +43-1-31336-4376
Email: isabell.claus@wu.ac.at
Supervisor: Reinhard Moser
Supervisor Email: reinhard.moser@wu.ac.at
18th EDAMBA Summer Academy
Soreze, France
July 2009
Abstract
“Sovereign Wealth Funds (SWFs) are defined as special purpose investment funds or
arrangements owned by the general government. (…) SWFs hold, manage, or administer
assets to achieve financial objectives, and employ a set of investment strategies that include
investing in foreign financial assets (…).” (Willson, 2008) The focus of the thesis is on an in-
depth exploration of characteristics of investment strategies of SWFs. By applying a cluster
analysis the thesis aims to provide a precise description of SWFs as an investor group.
Afterwards it establishes a link between corporate governance structures of the SWFs and the
analyzed investment strategies.
1. Introduction to the research field
Sovereign Wealth Funds (SWFs) has become a frequently used term in the business media.
While some of the SWFs have existed since the 1950ies they never attracted so much
attention from economists, politicians and the public worldwide until recently. Numerous
headlines e.g. in The Wallstreet Journal (e.g. Davis, 20.03.2008), the Financial Times (e.g.
Burton, J., 22.08.2008), The Economist (e.g. Economist Intelligence Unit ViewsWire,
28.2.2008), or the Journal of Applied Corporate Finance (e.g. Butt et al., 2007) serve as
examples for the growing interest in the investor type that appears on the scene
internationally. Furthermore, recent activities of the IMF (IMF Survey, 04.03.2008),
publications by the OECD (Gow, 21.08.2008) and the European Central Bank (Beck and
Fidora, July 2008) as well as regulatory initiatives by governments e.g. of Germany
(Blundell-Wignall, 01.01.2008) and the US (Levin, Carl, 23.0