DAVOS-This year's most in-demand guests: Sovereign funds

By Natsuko Waki

LONDON, Jan 17 (Reuters) - Business and political leaders will be queuing up to talk to sovereign wealth investors at next week's Davos forum as debate rages over whether these cash-rich funds are the saviours of global finance or a threat to economic stability.

Sovereign wealth funds, state-run investment vehicles which manage assets of over $2 trillion, have shot up to the main stage of the world economy in the past few months with their $60 billion injection into banks hit by the U.S. mortgage debacle.

The sheer scale of their investments became more evident this week as funds from Asia and the oil-rich Middle East poured nearly $20 billion into Citi (C.N: Quote, Profile, Research) and Merrill Lynch MER.N.

Eager to find investment destinations for their burgeoning coffers, SWFs are transforming the landscape of global markets after liquidity dried up for hedge funds and private equity.

"Emerging markets have lived up to their name, and are now a greater economic bloc than the United States. These are countries that are giving emergency aid to the world's rich countries," said Filip Weintraub, portfolio manager at Norway's Skagen Global.

"They now have appetite for risk to increase returns. Then (the West) run into a dilemma - you need the money but you don't want to give up control. You don't want to sell up a part of such an important part of your infrastructure."

In the Swiss ski resort of Davos, business leaders will have a rare chance to mix with managers of the world's top wealth funds at the annual World Economic Forum meeting.

Next Thursday's session on SWFs brings key speakers in the field, including Bader Al Sa'ad, head of the Kuwait Investment Authority; Muhammad Al-Jasser, Vice Governor of Saudi Arabia's central bank; Alexei Kudrin, Russia's finance minister; Kristin Halvorsen, Norwegian finance minister and Robert Kimmitt, U.S. deputy Treasury Secretary.