The combined value of the world’s sovereign wealth and public pension funds has declined for the first time ever over the last year following heavy losses across both stock and bond markets. An annual study of the sector by Global SWF estimated that losses over the period are $2.2 trillion.
According to the state-owned investment vehicles report, the value of assets managed by sovereign wealth funds has fallen from $11.5 trillion to $10.6 trillion, while the value of public pension funds has declined from $22.1 trillion to $20.8 trillion.
Global SWF’s Diego López acknowledged that such losses stemmed mainly from 10%-plus corrections in both stock and bond markets; a combination that has not existed in 50 years.
“These are paper losses and some of the funds will not see them realized in their role as long-term investors,” López commented. “But it is quite telling of the moment we are living.”
Of the 455 state-owned investors assessed in the report, Denmark’s ATP incurred the heaviest losses, plummeting by 45% to deal a combined loss of $34 billion to investors.