CHAPTER 1
INTRODUCTION

1.1. Objectives
Sovereign Wealth Funds (SWF) is the terms that often made headlines for their deals, their investments, their transparency and sometimes the lack of it. They hold the people’s money, hence the scrutiny from public eyes. They also have more aggressive risk appetite than the usual reserve manager of a country which uphold the liquidity, security, and profitability principals and that results in an even more detailed scrutiny to the SWF. The term SWF itself has first mentioned by Rozanov in 2005 when he wrote for Central Banking Journal1, but actually SWF have been around since before that. For example Government of Singapore Investment Corporation and Temasek
Holdings, the two prominent SWF from Singapore have already been established in
1981 and 1974, respectively.
SWF’s asset under management amount is also increasing overtime. Preqin estimated that the growth of asset is up from USD 3.07 trillion in December 2008 to
USD 6.3 trillion in March 2015 as seen in Figure 1.1 Sovereign Wealth Fund Assets under Management2. Norway’s Government Pension Fund currently has the biggest asset among them which is amounting to USD 882 billion3. It is interesting to see whether the smaller counterparts from Asia also enjoys the rise in their asset as well.
The objectives of this paper is to comprehend and appreciate the dynamics of smaller
SWF from emerging and developing Asia (IMF definition)4.

1

Rozanov, Andrew, 2005. Who holds the wealth of nations?
Preqin estimate, updated on March 2015
3
SWF Institute estimate, updated on April 2015
4
IMF’s World Economic Outlook Database April 2015 for criteria and countries that fall into emerging and developing Asia
2

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Figure 1.1.1. Sovereign Wealth Funds Asset under Management

Sovereign Wealth Funds Asset under Management in USD trillion from