Inflation Proofing: Sovereign Wealth Funds Buy Tangible Assets, our annual review of sovereign wealth fund investments in 2023, draws on IFSWF’s comprehensive proprietary database of sovereign wealth funds’ direct equity investments since 2015.
It reveals that as sovereign wealth funds come to terms with higher interest rates and the accompanying uncertainty regarding the future trajectory of consumer prices and company input costs, they have increased their exposure to tangible assets.
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The 2023 IFSWF Annual Review identifies three key themes in sovereign wealth fund investment activity:
- Real Estate: Back in Fashion… with a Twist: In 2023, sovereign wealth funds' real estate investments rose almost 50% to $14.8 billion, an amount last seen in 2018. Property also accounted for 20% of sovereign wealth funds’ direct investments.
- A New Frontier: The Industrial-Technology-Energy Transition Nexus: Sovereign wealth funds have extended their investment focus from software and services technology companies to those focused on hardware and industrials, marking a significant departure from previous years.
- The Venture Capital Winter Continues: In 2023, sovereign wealth fund direct investments in startups significantly decreased. This decline reflects a broader global trend, as 2023 was a challenging year for VC investment worldwide due to geo-economic challenges and concerns about the valuations of VC-backed companies.
The report also features an exclusive interview with Investment Corporation of Dubai COO, Douraid Zaghouani.
Douraid Zaghouani, Chief Operating Officer at Investment Corporation of Dubai talks to us about the fund's investment strategy and operations.