Sovereign Wealth Funds Key Players in 2018 Venture Capital

Venture capital was proven to be successful in 2018 thanks to sovereign wealth funds (SWFs), says Pension & Investments Online. Based on a report released by the International Forum of Sovereign Wealth Funds (IFSQF), these funds boosted the exposure of venture capital last year, with focus on private health-care organizations.

Wealth funds owned by states have invested in 27 deals in 2018 during the growth stage. This reflects a 42% increase as compared to 2017. Among these investment pools, the largest of them have investments twice the number of smaller ones. This means that the biggest wealth pools have completed 19 deals in 2018.

The report also shows that private health-care is a top priority for these state-owned funds, with 40 completed transactions in 2018 as compared to the 2017’s 21.

Aside from healthcare, the report also revealed that these sovereign pools made equity financing to private tech companies. Figures show that they have been investing in tech firms since 2015. In 2018, they have placed $3.4 billion into 44 completed transactions.

Overall, the recorded number of finished deals last year is 66, which is more than double the figure in 2017, which is 31.

While SWFs made a lot of early-stage investments, the report says that they invested in fewer direct equity deals last year (224) when compared to 2017’s figures (234). This reflects a fall from $29.2 to $23.4 billion in 2017 and 2018, respectively.

The IFSWF report remarked that the analysis aims to ‘improve public understanding of SWFs.’ It also seeks to provide a better perception of how these pools allocate their assets by analysing their investment trends.

The study looked at a good number of SWFs such as Singapore’s GIC valued at $350 billion, Temasek Holdings valued at $226 billion, Abu Dhabi’s Mubadala Investment Co. valued at $126.7 billion and the Qatar Investment Authority valued at $320 billion.