Sovereign Wealth Funds: A literature review

• Sovereign Wealth Funds (SWFs) are government-owned entities with assets exceeding US$6 trillion.
• This paper presents a survey of the growing literature on SWFs.
• The motives for SWFs are found to be economic as opposed to political.
• Conflicting evidence on whether SWFs create value for target firms. Mostly not on the long-run.

This paper reviews the research on the $6.65 trillion dollar Sovereign Wealth Funds (SWF). The literature, which has only appeared in the last few years, focuses for the most part on the investment behavior of SWFs, especially in light of calls for the regulation of these financial entities. The literature exhibits strong support for the idea that the motives of SWFs are economic, rather than political, as their opponents would claim. There appears to be conflicting evidence as to whether SWFs increase value.