Global oil funds get more bang for bucks—in health care
Global crude prices are in the midst of a slump, squeezing the bottom lines of oil companies and petro-states around the world. So how do sovereign wealth funds (SWFs) cope in this environment?
. Most SWFs, particularly those based in the Middle East, are notoriously secretive yet have a lot of weight—and cash—to throw around in global markets.
notes that SWFs sustained heavy losses in the 2008 crisis, but recovered them “by demonstrating their willingness to be long-term investors and riding out their financial turmoil.”
Still, oil prices have shed more than 50 percent of their value in the last year, raising the question of how these megafunds cope when the very source of their wealth is eroding, with little relief in sight.
A recent study by the Sovereign Wealth Fund Institute sheds some light on how these funds are sinking a lot of money into different assets and regions. According to the organization’s data, SWFs have developed a particularly voracious appetite for health care over the last decade, spending more than $26 billion on the sector since 2003.
Of that amount, SWFs—primarily those based in Asia—have spent $17.4 billion on pharmaceuticals, and over $4 billion more on investments in health-care providers.
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