Sovereign Wealth Funds: Investment Choices and Implications Around the World

49 Pages Posted: 12 Feb 2009 Last revised: 15 Mar 2011

See all articles by Nuno Fernandes

Nuno Fernandes

University of Navarra, IESE Business School; European Corporate Governance Institute (ECGI)

Date Written: March 1, 2011


This study focuses on a major global phenomenon: the rise of sovereign wealth funds (SWFs). Using data from 2002 through 2007 that includes SWF holdings in 8,000 firms in 58 countries, we find that firms with higher ownership by SWFs have higher firm valuations and better operating performance. The results are not driven by any particular SWF. Evidence of SWF impact on firms is also obtained from tests of changes in operating performance and value, before and after large purchases by SWFs. Additionally, we find evidence that after a large investment by SWFs, firms have better monitoring, expand their international operations, and are able to raise more capital as a consequence of the SWF investment.

Keywords: Sovereign Wealth Funds, International Capital Markets, Investment Choices, Institutional Investors

JEL Classification: G15, G20, G23, G28, G32

Suggested Citation

Fernandes, Nuno, Sovereign Wealth Funds: Investment Choices and Implications Around the World (March 1, 2011). Available at SSRN: or

Nuno Fernandes (Contact Author)

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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