Determinants of sovereign wealth fund investment in private equity vs public equity

Sofia Johan; April Knill; Nathan Mauck

doi:10.1057/jibs.2013.1

Determinants of sovereign wealth fund investment in private equity vs public equity

Sofia Johan^* (Corresponding Author)
, April Knill
, Nathan Mauck

^*Corresponding author for this work

Business Management

Florida State University
University of Missouri at Kansas City
York University Toronto
Tilburg University

Research output: Contribution to journal › Article › peer-review

82 Citations (Scopus)

Abstract

This paper examines the investments of 19 sovereign wealth funds (SWFs) in 424 firms (both public and private) around the world from 1991 through 2010. The data indicate that SWFs, similar to other institutional investors, are less likely to invest in private equity than in public equity internationally. However, the economic significance of this impact is surprisingly low. Unlike other institutional investors, SWFs are more likely to invest in private equity compared with public equity in target nations where investor protection is low, and where
the bilateral political relations between the SWF and the target nation are weak. Surprisingly, cultural differences play a marginally positive role in the choice to invest in private equity investment outside an SWF's own sovereign nation. Comprehensively, we find that SWFs act distinctively from other traditional institutional investors when investing in private

Original language	English
Pages (from-to)	155-172
Number of pages	18
Journal	Journal of International Business Studies
Volume	44
Early online date	11 Mar 2013
DOIs	https://doi.org/10.1057/jibs.2013.1
Publication status	Published - 2013

Bibliographical note

We owe thanks to Kathryn Dewenter, Alexander Dyck, Josh Lerner, Adair Morse, the seminar participants at Bocconi University, Florida State University, York University, EMLYON Business School, University of Calgary and National University of Singapore, and conference participants at the European Financial Management
Symposium (2011), the Global Finance Conference (2011), the French Finance Association AFFI Annual Conference (2011), the American Economic Association (2012), and the Financial Management Association Annual Meeting (2012). A special thanks goes to the Editor, David Reeb, for all his help on this paper.

Keywords

sovereign wealth fund
private equity and portfolio
financial mark
legality
government policy and regulation
political relations and regulation

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Cite this

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title = "Determinants of sovereign wealth fund investment in private equity vs public equity",

abstract = " This paper examines the investments of 19 sovereign wealth funds (SWFs) in 424 firms (both public and private) around the world from 1991 through 2010. The data indicate that SWFs, similar to other institutional investors, are less likely to invest in private equity than in public equity internationally. However, the economic significance of this impact is surprisingly low. Unlike other institutional investors, SWFs are more likely to invest in private equity compared with public equity in target nations where investor protection is low, and where the bilateral political relations between the SWF and the target nation are weak. Surprisingly, cultural differences play a marginally positive role in the choice to invest in private equity investment outside an SWF's own sovereign nation. Comprehensively, we find that SWFs act distinctively from other traditional institutional investors when investing in private ",

keywords = "sovereign wealth fund, private equity and portfolio, financial mark, legality, government policy and regulation, political relations and regulation",

author = "Sofia Johan and April Knill and Nathan Mauck",

note = " We owe thanks to Kathryn Dewenter, Alexander Dyck, Josh Lerner, Adair Morse, the seminar participants at Bocconi University, Florida State University, York University, EMLYON Business School, University of Calgary and National University of Singapore, and conference participants at the European Financial Management Symposium (2011), the Global Finance Conference (2011), the French Finance Association AFFI Annual Conference (2011), the American Economic Association (2012), and the Financial Management Association Annual Meeting (2012). A special thanks goes to the Editor, David Reeb, for all his help on this paper.",

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AU - Mauck, Nathan

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AB - This paper examines the investments of 19 sovereign wealth funds (SWFs) in 424 firms (both public and private) around the world from 1991 through 2010. The data indicate that SWFs, similar to other institutional investors, are less likely to invest in private equity than in public equity internationally. However, the economic significance of this impact is surprisingly low. Unlike other institutional investors, SWFs are more likely to invest in private equity compared with public equity in target nations where investor protection is low, and where the bilateral political relations between the SWF and the target nation are weak. Surprisingly, cultural differences play a marginally positive role in the choice to invest in private equity investment outside an SWF's own sovereign nation. Comprehensively, we find that SWFs act distinctively from other traditional institutional investors when investing in private

KW - sovereign wealth fund

KW - private equity and portfolio

KW - financial mark

KW - legality

KW - government policy and regulation

KW - political relations and regulation

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DO - 10.1057/jibs.2013.1

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JO - Journal of International Business Studies

JF - Journal of International Business Studies

ER -

Determinants of sovereign wealth fund investment in private equity vs public equity

Abstract

Bibliographical note

Keywords

Access to Document

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