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

William L. Megginson (), Diego Lopez and Asif I. Malik
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William L. Megginson: Michael F. Price College of Business, University of Oklahoma, Norman, Oklahoma 73019, USA
Diego Lopez: Global SWF LLC, New York, NY 10016, USA
Asif I. Malik: Michael F. Price College of Business, University of Oklahoma, Norman, Oklahoma 73019, USA

Annual Review of Financial Economics, 2021, vol. 13, issue 1, 247-270

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.

Keywords: sovereign wealth funds; public pension funds; government policy; government regulation (search for similar items in EconPapers)
JEL-codes: G15 G32 G38 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (11)

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DOI: 10.1146/annurev-financial-110420-090352

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