They reduce for deterioration of these links

They have long floated as in zero gravity above the fray and markets. Sovereign wealth funds, the "macrogérants" national, in charge of build the wealth of their countries, made a hard landing since the financial storm. Long-term investor is not mechanically with prudent and cautious as investor come to testify the woes of Dubai. The sovereign funds from its neighbour and Savior, the Abu Dhabi Investment Authority was not spared by the crisis. He has indeed recorded a loss of 40 in 2008 (read souspap), for losses of 36 and 41 of its counterparts Kuwait and Qatar, according to the independent body of the Council on Foreign Relations. Only six institutions in the Gulf Cooperation Council were collected at the same time 273 billion with revenues from oil exports, which allowed them to invest in depreciated courses and to lower their cost of returned average. A manna which is deprived Dubai.

Sovereign wealth funds are rarely explicit about their objectives and, hence, their taking real risk. Indeed, on the 10 greatest players (1), only 2, the Australia and China (China Investment Corporation), have explicitly given the goal of annual performance of their portfolio, around 5, then the Kuwait Investment Authority believes that its purpose is to do better than its benchmark on 3 year rolling. Not to engage his intentions may allow the funds do not suffer pressure in their country for temporary underperformance. A privilege that should enable them to manage with a very long time without concern for the short term horizon. Only, this can also lead to questionable investment choices, as a sovereign wealth Fund is a State investor very particular, altruistic, opportunistic, or partisan, or both (read box) 3. The research of performance is not always its only goal, despite the declarations of principle of many of these actors. It must also meet its State.

Emanation of their nation, sovereign wealth funds are permeable to the influence of their Government, whose members often sit on their Board. This is the case in 8 of the 10 greatest players, with the exception of Temasek and the Australian Fund. Hence a permeability. Thus, a study reveals that funds thus prefer to invest in countries with which they have less narrow and less extensive than other political relations (2). Their flows of investment increase in a given country as a result of improved political relations with this country. They reduce for deterioration of these links.

A special behavior

The level of political relations affect investments in the United States, Great Britain, Australia or France when the United Arab Emirates Fund which invests. It is also the case in Switzerland, India or the Netherlands when the Singapore Fund that puts their money. Thus, their investments or divestitures are the "continuation of politics by other means". Where the investment to the economic and financial logic sometimes disconcerting. Example Making the Libya Fund's participation in the Juventus of Turin football club in 2003 occurred at a time when the country began a process of diplomatic warming with the West.

"This suggests that these funds do not behave as other economic agents, pointed out the authors of the study." Their investments well improve political relationships when they are conducted in rather closed countries. On the other hand, they tend to embarrass them and disrupt when they are carried out in open countries (developed countries) by actors. "It is their supposed ulterior tend to tense their host countries, which may see where the action standards of countries whose funds are originating. The market is less reluctant. Indeed, attempts to catch of interests of sovereign wealth funds in other countries were more likely to succeed than those at the initiative of public or Government groups (3) and other organizations. Their size and power, they are perhaps most persuasive and influential than others with shareholders. In the crisis, they were often the investor of last resort in certain sectors such as the Bank.

A form of influence

However, reaction positive and short-term the market as to their entry into the capital of the target companies is well smaller magnitude than those of other organizations, with a gap of a third party. Medium term, the performance of the companies proved disappointing revealed much work. This casts doubt on their ability as a shareholder to extract significantly the value of their investment by their activism, lobbying initiatives.... Yet, they are are, in any case behind the scenes, including when a Fund takes a stake in a company of his country. "We found on long period (1987-2008) that close to a taking on two of a sovereign Fund in a society was followed by events (changes in the management of companies target...). "signs of a form of influence and control of these players on their"prey"," Note researchers (4).

When a fund established in the business of his country can affect regulation and the decisions of the Government to increase the value of its investment, or can it benefit above privileged information that led him to think that this business or its sector will grow in the future There is in any case that Government decisions favourable to the target company are 5 times more frequent than the negative one year after a sovereign fund put there money. Same country. Sovereign fund may also make the "networking" with its many interests. An actor as Mudabala and especially Temasek are followers. His principle Organize financial and strategic operations (buyback...) between many of the companies in which it is invested. Sovereign wealth funds often maintain a certain halo for their true intentions. Their activism is done from the eyes, but it is real in some cases. They are also vocal and explicit on their exercise of the voting rights policy. On the largest ten sovereign, only 3, the two Singaporeans, HDG, Temasek and fund Koweitien, sometimes sit on the Board of Directors of the companies in which they have invested. This is especially the case when their interests are important.