History of Sovereign wealth fund in Timeline

Sovereign wealth funds (SWFs) are state-owned investment funds that invest in various assets globally, including stocks, bonds, real estate, precious metals, private equity, and hedge funds. They are typically funded by commodity export revenues or foreign exchange reserves held by central banks. SWFs play a significant role in global finance, managing vast sums of money and influencing market trends. While they offer diversification and long-term investment strategies, they also raise concerns about transparency, accountability, and potential political influence. The size and scope of SWFs vary widely, with some focusing on specific sectors or regions while others maintain broad diversification.

1953: Establishment of Kuwait Investment Authority

The Kuwait Investment Authority, a commodity SWF, was established in 1953 using oil revenues before Kuwait gained independence from the United Kingdom. This marks the first SWF established for a sovereign state.

1956: Establishment of Kiribati's Revenue Equalization Reserve Fund

The Revenue Equalization Reserve Fund of Kiribati was established in 1956 when the British administration of the Gilbert Islands imposed a levy on phosphate exports. It has since grown to $520 million.

2000: Dramatic Increase in SWFs Since 2000

Since 2000, there has been a dramatic increase in the number of sovereign wealth funds globally.

2005: First Use of the Term "Sovereign Wealth Fund"

In 2005, Andrew Rozanov coined the term "sovereign wealth fund" in his article "Who Holds the Wealth of Nations?" published in the Central Banking Journal.

2007: China's Entry into Global Markets

In 2007, China's sovereign wealth funds made their debut in the global market, marking a significant expansion in their influence and scale.

2007: SWFs and the 2007-2008 Financial Crisis

In 2007, Sovereign Wealth Funds (SWFs) were among the first to utilize sovereign capital to mitigate the financial damage during the initial phase of the 2007-2008 global financial crisis, demonstrating their ability to react swiftly due to their active market participation.

September 2008: Santiago Principles Summit

On September 2-3, 2008, several major SWFs convened in Santiago, Chile, to address transparency concerns and draft the Santiago Principles, a set of international standards for SWF operations.

October 2008: Publication of Santiago Principles

The 24 Santiago Principles, developed by the International Working Group of Sovereign Wealth Funds under IMF leadership, were presented to the IMF International Monetary and Financial Committee and published on October 11, 2008.

2008: Growth of SWFs

Between 2008 and 2021, SWFs experienced rapid growth, with global assets under management increasing from about $4 trillion to over $10 trillion.

2008: SWFs and the 2007-2008 Financial Crisis

In 2008, Sovereign Wealth Funds (SWFs) were among the first to utilize sovereign capital to mitigate the financial damage during the initial phase of the 2007-2008 global financial crisis, demonstrating their ability to react swiftly due to their active market participation.

2012: SWF Investment in Real Estate

In the latter half of 2012, approximately US$9.26 billion in direct sovereign wealth fund transactions were recorded in institutional real estate, as reported by the Sovereign Wealth Fund Institute's transaction database.

2014: Study on SWF Creation

A 2014 study indicated that the creation of SWFs is not primarily driven by reserve accumulation or commodity-export specialization, but rather by a trend among governments influenced by their peers.

2014: SWF Investment in Real Estate

During the first half of 2014, global sovereign wealth fund direct deals reached $50.02 billion, according to the SWFI.

2016: Adoption of Santiago Principles

By 2016, 30 funds, representing 80% of global SWF assets or US$5.5 trillion, formally adopted the Santiago Principles.

December 2020: SWF Assets Under Management

As of December 24, 2020, the assets under management of SWFs reached $7.94 trillion.

2020: SWF Funding and Regional Distribution

In 2020, SWFs funded by oil and gas exports totaled $5.4 trillion. Non-commodity SWFs are generally funded by transfers from foreign exchange reserves, budget surpluses, and privatization revenues. Middle Eastern and Asian countries account for 77% of all SWFs.