Sov investment funds stakes in Europe firms fall

LONDON Fri Aug 13, 2010 1:22pm IST

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LONDON Aug 13 (Reuters) - Stakes in British and continental European publicly-listed companies held by state-owned investment funds have fallen slightly since the start of 2010 after sharp rises in 2009, according to Thomson Reuters data.

The combined total of listed equity assets held by government-owned funds in Europe outside Britain fell to $206.5 billion at the start of August from $217.1 billion in the first quarter of 2010.

UK equity stakes held by sovereign funds dipped to $80.5 billion earlier this month, having nearly doubled to $89.8 billion in the first quarter of 2010 from $48.7 billion in the same period last year.

The data may reflect a growing trend of sovereign wealth funds making deals outside public equity markets, after they came under pressure for poor performance during the crisis from their investment in Western stock markets.

Over the past year they have been increasingly expanding their portfolio in emerging and frontier markets, where some of them have invested in long-term infrastructure or resource projects, which are not captured by listed equities data.

The data was compiled from holdings in listed equities worth $608.5 billion by state-owned investment vehicles in countries including China, Korea, Hong Kong, Taiwan, Singapore, Brunei, Malaysia, Vietnam, Kuwait, the United Arab Emirates, Oman, Saudi Arabia, Qatar, France, Norway and Canada.

Listed equity holdings by these funds covered by this data make up roughly 20 percent of total assets managed by sovereign wealth funds, which manage an estimated $3 trillion of windfall revenues for future generations.

The data largely consists of stakes owned by sovereign wealth funds but also includes other types of state-owned fund.

Continental Europe's share in their stakes ticked up to 34 percent from 33.2 percent in late 2008, while North America's share rose to 18.5 percent from 14.2 percent.


For a graphic on regional breakdown, click on:


Holdings in North American stocks remained largely steady at $112.7 billion in August, after jumping to $113.3 billion at the start of 2010 from $57.6 billion in the fourth quarter of 2008.

The sharp rise then partly reflected the purchases of stakes in the struggling U.S. financial sector, such as Citi (C.N) and Morgan Stanley (MS.N) during the financial crisis.

According to think tank Monitor, sovereign wealth funds made 16.7 percent of their investment in North America last year, compared with 42.4 percent in Europe.

The Middle East and North Africa made up of 23.3 percent of their deals last year, while Asia-Pacific represented 13.4 percent.

For related stories on sovereign funds, see [ID:nLDE66710K] (Editing by Andrew Heavens)

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