SWFs Singing In The Rain

Ashby Monk

In my view, SWFs’ internal capabilities have actually improved as a result of the financial crisis. With so many finance professionals losing their jobs over the past few years, these funds have been able to pick up some serious talent (that they might not have been able to afford pre-crisis). In fact, the CICSAFEADIA, and the Future Fund have all made announcements about hiring in the past month alone.

This hiring spree just reminds me of the strategic advantage that long-term, well-resourced investors have during a crisis. As we have seen, SWFs have the ability to pick up illiquid investments at fire sale prices. They can hire all-star talent for the price of a mere mortal. Moreover, the international political problems that plagued these funds have been pushed under the carpet due to the global economic turmoil. And lets not forget that the ever-present fear of inflation has now provided certain funds with a legitimate reason to invest in–what has started to feel like–every commodity company in the world.

I’m starting to think that some SWFs don’t view the past two years as being a crisis at all; they’ve been singing in the rain! (Except for Dubai World of course…)

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About

This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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