Sovereign Wealth Funds

Abstract

Abstract This chapter introduces sovereign wealth funds (SWFs) and where they stand in the world of state capitalism. SWFs are gradually becoming leading participants in the alternative investor ecosystem, and are another expression of state capitalism. This chapter highlights the challenges of categorizing state investment funds, and argue that what sets SWFs apart is an ostensibly inter-generational savings focus. Through the usage of examples, we highlight the great diversity in SWFs in terms of size, scope, and quality of governance, and contrast those that have some focus in internal investment to promote national development with those that are purely external focused. Again, we draw attention to the case of SWFs that have faced rapid depletion, and explore what sets them apart from more prosperous funds. Finally, we explore how SWFs may be theorized in terms of ethics, state capabilities and orientation, diplomacy, and via network theory.