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’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.