SWF: BEST THREE LETTERS ON PLANET. No, not ‘Single White Female’… Sovereign Wealth Fund

Er, what is an SWF?  By Fiona Chan

Where do you see this?   Most often in news articles, usually involving some billion-dollar investment deal.

What does it mean?  SWFs, or sovereign wealth funds, are government-owned investment funds that invest their country’s savings or reserves in international assets such as stocks and bonds.

Singapore’s Temasek Holdings and Government of Singapore Investment Corporation (GIC) are well-known examples of SWFs, as are the Kuwait Investment Authority, the Abu Dhabi Investment Authority and Norway’s Government Pension Fund.

Why is it important?  Some of them have received negative publicity in recent years, either because their foreign investments have raised political hackles in their target countries or because the big stakes they bought in Western banks became near-worthless during the financial crisis. But GIC deputy chairman and executive director Tony Tan said last month that SWFs will be important to the global economic recovery as they are long-term investors whose capital will help emerging markets develop.

So you want to use the term. Just say…

‘Some investor just bought the Empire State Building entirely in cash! Must be an SWF.’

JLD NOTE: And we all love SWF because they are transparent, understand ‘risk vs. reward’, and don’t micro-manage.  Plus they love real estate!!