Germany in April moved to protect its domestic firms, while Britain's National Security and Investment Bill will bring new powers to scrutinise and intervene in 'malicious' foreign investment.Ĭoncerns over the vulnerability of strategic European companies has grown since Saudi Arabia's Public Investment Fund amassed stakes in four European oil majors earlier this year, said Winston Ma, former managing director of China Investment Corp, a sovereign wealth fund. The outlook for sovereign funds may also be clouded by several European countries tightening their investment rules. It also reflects how valuations in the United States, particularly of larger companies, have rebounded from their COVID-19 lows, while there have been less distressed situations and bankruptices compared to previous recessions, according to PwC.

'Sovereign wealth funds are investing in sectors that would have benefited during the COVID crisis and that is reflected in the prices they're paying,' said Victoria Barbary, IFSWF's director of strategy and communications. In part, high valuations may reflect where sovereign funds are putting their money, such as within e-commerce or healthcare. Jackson-Moore noted the contrast with the period after the 2009 global financial crisis, when asset prices fell and many funds scaled back their private market investments.Ĭurrent asset prices were still 'very high' despite uncertain economic conditions, he said, raising questions of whether 2020-21 deals would be a 'good vintage'.

Singapore's GIC and Abu Dhabi's Mubadala, two wealth funds which claim some of the most active venture capital units, have invested the most since April, according to Global SWF. Venture capital also remained popular, with sovereign funds taking part in deals with a total value of $14.7 billion since April, up more than half from the year-ago period, PitchBook data showed. Some of that relates to bailouts of troubled domestic firms in the pandemic's wake, as well as the participation of several in a major deal to raise stakes in BlackRock in May. Sovereign funds have played a part in $50.2 billion worth of private equity deals since April, 13% up from the same period last year, PitchBook data showed.

'We are flat out right now, probably at double-digit in terms of activity levels working with the private markets versus last year - and this time last year wasn't quiet.' 'The number of deals coming back is a good, healthy sign for SWF deal appetite right now,' said Will Jackson-Moore, global private equity, real assets and sovereign funds leader, PwC. Advisers say the average deal size, and therefore the valuations of companies and other assets being acquired, has generally held up in the aftermath of the crisis. The overall number of investments year to date has fallen by 10% to 274.

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