Coldplay may have answered EMI's rumored hopes
Elizabeth Taylor and Kathy Ireland walk away from jewelry company
More controls not the answer for China
KKR still has IPO envy?
Liquidnet looks for IPO liquidity
Energy Recovery: a cleantech deal hits the IPO market
Booze a defensive play in a bear market
Dollar rises vs euro after ECB's Trichet signals one rate hike may be enough
Who will make the next generation of thinner TVs: Samsung, Sony, Panasonic or Toshiba?_thumbnail.gif){kind=logo}
Analyst downgrades: NVDA, AFLYY and UNH
Sprint Nextel finally in the midst of a turnaround?
U.S. weekly jobless claims pass 400k, signaling further economic slowing
Blockbuster could come back for Circuit City?
Yahoo! (YHOO) looks for another partner
Before the bell: AMR, GOOG, AAPL
Lehman issuing stock to employees smells of desperation
Just a year ago, if you mentioned "sovereign wealth funds," you probably would have gotten a blank stare. But, of course, this is now the hot thing in finance. More importantly, it looks like sovereign wealth funds are poised for strong long-term growth. In fact, Lehman Brothers (NYSE: LEH) recently set up a division to capitalize on the mega trend.
Sovereign wealth funds are found in many countries in Asia, Africa, Europe and the Middle East. It's the inevitable consequence of some major forces: strong economic growth in emerging economies, the fall in the US dollar and spikes in commodities prices, especially oil.
Global Insight, a research firm, estimates that sovereign wealth funds have grown an average of 24% per year for the past three years. They have about $3.5 trillion in assets, which is more than private equity and hedge funds combined.
No doubt, sovereign wealth funds have become a key element in global finance. For example, they contributed to about 28% of M&A deals (in January 2008) and about 10% of private equity transactions.
Global Insight forecasts that – by 2015 – sovereign wealth funds will exceed the value of the GDP of the US economy. And, I'm sure, the funds will also own a big chunk of it as well.
Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com) and is also a principal in Averiware, which provides an ERP system to small and midsize businesses.
