FT Alphaville has an interesting post about Sovereign Wealth Funds, SWF. There are a lot of these, maybe as many as 25, and the dollars involved is in the trillions. This capital will flow somewhere, actually many different somewheres, and be very important to understand. Being able to follow this sort of thing, or somehow be in front of it even, will go a long way to putting the odds for success in your favor.
If an SWF is having success with an investment destination it is like to continue to direct new investment to that same place. You catch a tailwind by going along for the ride.
You may have heard that Nasdaq is buying the OMX Group which owns a lot of exchanges in Northern Europe including Iceland. I actually wrote about OMX being a target a year ago for RealMoney. I subsequently bought the stock and sold too early. Perhaps this deal creates visibility for access to Iceland and some of the other interesting markets OMX trades in.
Wikinvest Wire
4 comments:
Does the SWF thing get anyone other than me a little bit anxious? I mean, how long before a country like China just outright buys all the shares of (insert company here) and essentially creates a state ownership situation?
Excuse my ignorance but are there laws in place to prevent a government from purchasing a controlling interest in (insert company here)?
A government no longer needs to just force a business to become state owned - they simply buy it on the open market with reserves.
Just feeling a little queesy about the impact of this type of thing.
i would refer you to the CNOOC/Unocal and Dubai Ports issues from the last couple of years to help address your concerns.
to me the bigger concern would be whether this is a sign of a top.
"I never buy at the bottom and I always sell too soon"
- Baron Rothschild
Perhaps you are correct. The CNOOC/Unocal thing was a public company bidding for another public company. I am not sure how that would all play out if private equity money (via Blackstone or someone else) was involved. Since China is now a ~10% stakeholder in Blackstone, they could indirectly own entire companies that way. How are we to monitor/stop that?
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