Internet update

Citation

Almond, N. (2009), "Internet update", Property Management, Vol. 27 No. 2. https://doi.org/10.1108/pm.2009.11327bag.001

Internet update

Article Type: Internet update From: Property Management, Volume 27, Issue 2

In my last update, I looked at the availability of information on the financial services sector, and in this I touched briefly on Sovereign Wealth Funds (SWFs). These funds have been around for some time now, but have only recently hit the headlines, having ploughed money into rescuing ailing investment banks such as Morgan Stanley and Merrill Lynch, as well as buying more novelty items such as football clubs. Real estate has also been on their shopping list too, again with high profile purchases such as the Chrysler Building by the Abu Dhabi Investment Council. Until recently, the activities of SWFs were very secretive, and to an extent, still are. So what are they, and what information is available on the web?

SWFs are state owned investment funds, which invest in a range of financial assets, using monies from non-commodities, e.g. foreign exchange reserves, or from commodities, in particular through the sale of oil, hence the proliferation of funds in the Middle East. As a starting point, the most useful reference point is the Sovereign Wealth Fund Institute (www.swfinstitute.org) which is an organisation set up to study sovereign wealth funds and provides an array of data on funds across the Globe. The “What is?” section provides a brief overview on what sovereign funds are and how they are classified. This is quite handy given that different people will interpret funds in different ways. Take for example the Middle East where there is a lot of private family wealth (some rulers of countries); are these sovereign funds or private funds? What about some of the large pension funds – how are these classified? This site tries to tackle some of these questions.

To delve into the detail on funds, on the left had pane of the window, there is a list of funds from Algeria to Vietnam. Click on any of these and a detailed picture emerges. I took China Investment Corporation (CIC), as an example. The summary page provides an array of information covering its background, strategic objectives, details on Sovereign Wealth Enterprises (vehicles held by the SWF itself) – in this case, there are three including Central Huijin Investments Ltd. Finally, there is a news section, which lists various articles relating to that particular fund, this section also includes detail of any major public or private investments; for CIC this included investments in Blackstone Group and Morgan Stanley. Finally, there is also a link to the website for the fund (www.china-inv.cn/cicen/), which luckily is available in English! Its worth looking through each of the individual funds and various web links, as this is likely to produce most of the information you will want on funds.

Back on the SWF Institute web site, there is a “Fund Rankings” section which lists the various funds by assets – the largest being ADIA at $875bn (at the time of writing), down to the East Timor Petroleum Fund at just $3.2bn. Taking the “Research and statistics” link provides a number of links to various charts and graphs on the SWF universe. Of course, whilst the information available is of use to those new to the subject, more detailed reports and research is available on subscription, detail of which can be found on the site.

For further news stories, it is worth checking out the SWF Radar site (www.swfradar.com). This site provides a searchable news facility on SWF related material since October 2007. By browsing the archives, you can select an appropriate month and scroll down the listings. Alternatively, you can search under a particular name or fund to find details. I chose “CIC” and it returned links to 177 articles! I will let you browse at your leisure!

One of the main sites I used in the last editorial was the International Financial Services London site (www.ifsl.org.uk), which provides a report and data sheet charting the size, growth and make up of SWFs. The latest report released in March 2008, also provides links to other organisations who have produced reports on SWFs. These include Citi Group, Deutsche Bank Research, McKinsey & Co, Morgan Stanley, and Standard Chartered – I will let you browse through these at your leisure. The IMF and OECD are also listed. I took a quick look at these latter sites and ran a search on Sovereign Wealth Funds, which returned a number of articles of use. Separately I have also come across some general reports from JP Morgan and the Monitor Group. It’s worthwhile running a search on these companies to see what is available direct from their web sites.

Running a quick Google search provided little more than has already been listed. Most of the articles returned were from news articles. Perhaps the most relevant was from the Financial Times which has a whole section on its site devoted to SWFs (www.ft.com/indepth/sovereignfunds) – you may need a subscription to view these articles. It is also worth while visiting The Economist web site (www.economist.com) and running a search from here for relevant articles.

Of course with these funds being relatively secretive it is not always easy to find suitable articles on the real estate side. There are one or two reports out there on the web. EuroHypo produced a report entitled “Sovereign Wealth Funds: is property the next target” in April 2008 (see www.essenhyp.com/media/ehlisten/englisch/presse-research/Sovereign_Wealth_Funds_-_Is_Property_The_Next_Target_-_April_2008.pdf). CBRE (www.cbre.com/EN/Research/) also have a report on their website entitled “Sovereign Wealth Funds” as part of their Global Insights research. Degi, has also produced a short report on Sovereign Wealth Funds entitled “Sovereign Wealth Funds and their meaning for global real estate markets” (www.degi.com/index.php?id=92&L=1).

There are no doubt more reports out there, and too many to report on as part of this article. Simply type “Sovereign Wealth Funds Real Estate” into Google and it returns about 652,000 links. Some appear to be news articles, others wider reports which cover real estate as part of a wider report. For more general news on activities it is worth visiting Property Week (www.propertyweek.com) and, if you have a subscription, EGI (www.egi.co.uk).

Acknowledgements

The views expressed are those of the author and not those of DTZ.

Nigel AlmondAssociate Director, DTZ, London, UK