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Gold & Alternatives Are Now a Quarter of Sovereign Wealth Fund Assets

PwC  ( Original )
JAN 31, 2018

We know global governments have been steadily adding gold to their reserves for several years now. But it might be startling to know just how much of a stake they have in the gold price these days.

The PwC report, titled The rising attractiveness of alternative asset classes for Sovereign Wealth Funds, reports Sovereign Wealth Funds (SWFs) now allocate almost a quarter (23%) of their assets under management to alternative investments such as private equity, real estate, gold and infrastructure

The big problem with most of those investments is that in the event of a crisis, well, good luck selling them. “World financial systems are coming apart at the seams; anyone wants to buy a Moscow vacation home or a half-built bridge in Beijing?”

You can bet your last dollar (or ruble, or yuan) that in such an event you will not have to worry one iota about the liquidity of gold.

The report notes that including certain alternative asset classes is not without risks as the majority of alternatives are highly illiquid. An exception is gold, which has one of the highest rates of daily volumes exchanged and can provide protection against short and medium-term market corrections.

ORIGINAL SOURCE: Alternatives now make up almost a quarter of Sovereign Wealth Fund’s assets under management at PwC on 1/29/18