Who Is the Sovereign among Sovereign Wealth Funds? A Network Analysis of Co-Investments

Abstract

This article studies the co-investment patterns of global sovereign wealth funds (SWFs) in the 1980–2014 period. Data show that collaborative investments are gaining momentum among SWFs. In terms of targets, large-capitalization stocks and companies operating in the infrastructure and public utilities industries appear to be the preferred targets. There is evidence of a home-bias effect and of a preference to invest in foreign countries in partnership with local funds. The co-investments within a social network framework show the existence of a “small world” of relationships among most SWFs. In particular, the network of co-investments is rather segmented, with some funds being “brokers” of relationships within their subgroup but with no one fund being able to dominate the strategies of the whole network.

TOPICS: Private equity, global, legal/regulatory/public policy, statistical methods