A change of strategy for SWFs

SWFs presence in the global markets has become a routine. Every day we read that a significant number of SWFs buy or sell shares of many companies located in different countries. Even though this activism, sovereign funds have been keeping a low profile, acquiring minor participations. They haven’t interfered with the management choices and they have in this way clearly behaved as passive investors.

Recently however something has changed.  After the two unfortunate events that hit Malaysia Airlines, Khazanah Nasional, the country’s SWFs have decided to buyout the other shareholders, acquire full control and delist the company as part of an ongoing restructuring plan. In Bulgaria, the State General Reserve Fund, a SWF from Oman that owns 30% of the shares of the Corporate Commercial Bank has been discussing with the Bulgarian government a plan to stabilise the situation and rescue the bank. Last week GIC, one of the Singaporean sovereign funds acquired 50% of the assets of RAC becoming a strategic investor in the company together with the Carlyle Group.

These are three distinct events with significant differences with each other but they clearly show an emerging trend on the behaviour of SWFs, they indicate a shift from passive investors to more active investors. In a recent interview also Alasdair Warren, head of financial sponsors group for EMEA at Goldman Sachs commenting on the agreement between Carlyle Group and GIC said that it is likely that more acquisitions similar to this one are going to happen.

Copyright © 2014 Dini Sejko


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