Sovereign wealth funds including Nigeria’s will increase their assets by 60 percent over the next three years, bolstered by rising income from commodities and exports, according to UBS.
State funds will manage about $8.6 trillion in 2016, up from $5.3 trillion now, according to Massimiliano Castelli, head of strategy at Global Sovereign Markets, the unit of UBS Global Asset Management that services sovereign institutions worldwide.
Sovereign investors will also add more assets in emerging markets and cut holdings denominated in currencies such as the euro and the Japanese yen, he said.
“The main drivers of this growth are commodity prices, expected to remain at current levels over the next few years, and continuing current account surpluses of exporters,” Castelli said in a March 11 interview with Bloomberg from Zurich, where he is based, there’s also a “rising number of new state funds being established”.
Assets managed by sovereign wealth funds have risen fourfold in the past decade, making these state-owned investment vehicles bigger than private-equity and hedge funds combined, according to The City UK.
The assets held by sovereign investors will gain about 8 percent this year, according to the London- based group, set up to promote U.K. financial services.
The price of oil has more than quadrupled over the past 10 years, raising the revenue of exporting countries such as Norway and Kuwait.
Norway’s government Pension Fund Global is the world’s biggest sovereign wealth fund with $716 billion, and the Kuwait Investment Authority has $296 billion of assets under management, according to the Sovereign Wealth Fund Institute.
TUNJI OLAWUNI, Abuja
