The Investment Strategies of Sovereign Wealth Funds
Bibliographic Data
| ID | 4028887 |
|---|---|
| Authors | Shai Bernstein (Stanford University), Josh Lerner (0000-0003-3822-2162, Jacob H. Schiff Professor of Investment Banking, Harvard Business School, Harvard University, Boston, Massachusetts; Affifiliate of the National Bureau of Economic Research, Cambridge, Massachusetts.), Antoinette Schoar (Michael Koerner ‘49 Professor of Entrepreneurial Finance, Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts; Affifiliate of the National Bureau of Economic Research, Cambridge, Massachusetts.) |
| Year | 2013 |
| Volume | 27 |
| Issue | 2 |
| Pages | 219-238 |
| Publication date | 2013-02-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic Perspectives (JOURNAL) |
| Journal identifiers | ISSN: 0895-3309 • E-ISSN: 1944-7965 |
| Publisher | American Economic Association (PUBLISHER • US) |
| DOI | 10.1257/jep.27.2.219 |
| OpenAlex | W3121309976 |
| Language | EN |
| Citations received | 13 |
| References cited | 11 |
Sovereign wealth funds have emerged as major investors in corporate and real resources worldwide. After an overview of their magnitude, we consider the institutional arrangements under which many of the sovereign wealth funds operate. We focus on a specific set of agency problems that is of first-order importance for these funds: that is, the direct involvement of political leaders in the management process. We show that sovereign wealth funds with greater involvement of political leaders in fund management are associated with investment strategies that seem to favor short-term economic policy goals in their respective countries at the expense of longer-term maximization of returns. Sovereign wealth funds face several other issues, like how best to cope with demands for transparency, which can allow others to copy their investment strategies, and how to address the problems that arise with sheer size, like the difficulties of scaling up investment strategies that only work with a smaller value of assets under investment. In the conclusion, we discuss how various approaches cultivated by effective institutional investors worldwide-from investing in the best people to pioneering new asset classes to compartmentalizing investment activities-may provide clues as to how sovereign wealth funds might address these issues
Business · Corporate governance · Economics · Fund of funds · Global assets under management · Institutional investor · Investment management · Market economy · Market liquidity · Political science · Politics · Sovereign wealth fund · International Arbitration and Investment Law · Private Equity and Venture Capital · State Capitalism and Financial Governance · Finance
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| Unique citing works | 13 |
|---|---|
| Citations per year | 1,18 |
| Citation span | 2015 - 2026 (12) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 12 |