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Annual Review of Financial Economics

Volume 13, 2021

The Rise of State-Owned Investors: Sovereign Wealth Funds and Public Pension Funds

Abstract

State-owned investors (SOIs), including sovereign wealth funds and public pension funds, have $27 trillion in assets under management in 2020, making these funds the third largest group of asset owners globally. SOIs have become the largest and are among the most important private equity investors, and they are key investors in other alternative asset investments such as real estate, infrastructure, and hedge funds. SOIs are also leaders in promoting environmental, social, and governance policies and corporate social responsibility policies in investee companies. We document the rise of SOIs, assess their current investment policies, and describe how their state ownership both constrains and enhances their investment opportunity sets. We survey the most impactful recent academic research on sovereign wealth funds, public pension funds, and their closest financial analogs, private pension funds. We also introduce a new Governance-Sustainability-Resilience Scoreboard for SOIs and survey research examining their role in promoting good corporate governance.

Keyword(s): government policy, government regulation, JEL G15, JEL G32, JEL G38, public pension funds, sovereign wealth funds
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/content/journals/10.1146/annurev-financial-110420-090352
2021-11-01
2024-05-01
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/content/journals/10.1146/annurev-financial-110420-090352
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The Rise of State-Owned Investors: Sovereign Wealth Funds and Public Pension Funds
Annual Review of Financial Economics 13, 247 (2021); https://doi.org/10.1146/annurev-financial-110420-090352
/content/journals/10.1146/annurev-financial-110420-090352
/content/journals/10.1146/annurev-financial-110420-090352
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