I’m in the process of writing a ‘thought piece’ on the rise of SWFs based on some of the research we have done over the past two years. As part of this, I did a quick back-of-the-envelope calculation (based on a variety of sources) showing the number of new SWFs launched per decade. While I’ve seen different tallies than the one I came up with (due to alternative definitions for SWFs), the implication is always the same: the number of new SWFs has been accelerating over time. It’s really quite remarkable.
This then begs the question as to why SWFs have jumped in popularity. In my view, the market turmoil of the past few decades has served as an important catalyst for the rise of SWFs. Since these funds exist to stabilize and legitimize global market forces at the local level, the onslaught of financial and economic crises has driven governments to SWFs for a variety of reasons (self-insurance, stabilization, etc. ). More and more governments now see SWFs as an important buffer against the depredations of global capitalism.
The era of SWFs appears to be upon us. How can you conclude any differently after looking at this chart?