Sovereign Funds’ Spending Rebounds in Quarter, Institute Says

Sovereign wealth funds’ direct investments picked up in the fourth quarter from a year earlier, signaling a rebound after spending dropped to a six-year low in 2012, the Sovereign Wealth Fund Institute said.

Full-year direct spending, which excludes money outsourced to other funds or asset managers, slumped 36 percent to $57.3 billion, the Las Vegas-based institute said in an e-mailed statement. That’s the lowest since 2006, when direct investments amounted to $14.8 billion, it said.

“The fourth quarter of 2012 finished off the strongest in direct transaction amounts,” the institute said. “In fact, the fourth-quarter transaction amount for 2012 has topped 2011 and 2010 by a hair, but not 2009.”

While the MSCI World Index (MXWO)’s biggest gain in three years drove valuations of stocks higher, a measure tracking volatility showed the gauge eased in the second half after peaking in June. The sovereign funds more than doubled their spending in consumer-staples companies and added more information-technology and real-estate investments, while cutting holdings in banks, telecommunications and media, the institute said.

Sovereign wealth funds usually manage surpluses from reserves and exports of oil and other commodities.

To contact the reporter on this story: Klaus Wille in Singapore at kwille@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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