Sovereign Wealth Funds Boost Private Markets as 35% Target Resilience and Strategic Goals
Updated
Updated · secnewgate.co.uk · Jul 10
Sovereign Wealth Funds Boost Private Markets as 35% Target Resilience and Strategic Goals
3 articles · Updated · secnewgate.co.uk · Jul 10
Summary
Nearly 35% of sovereign wealth funds plan to raise allocations to private equity, private credit and infrastructure this year, extending a shift from public markets.
That move is increasingly tied to resilience and state mandates—not just returns—as funds target vulnerabilities in food, energy and water amid geopolitical fragmentation, economic coercion and energy insecurity.
Direct deals and co-investments now account for 50% to 60% of SWF private-market deployment, with MGX, Kuwait Investment Authority and Temasek backing AI infrastructure, PIF pursuing Electronic Arts, and GIC leading Anthropic's $30 billion round.
Cross-border scrutiny is rising as SWFs buy into critical infrastructure and data-heavy assets, with CFIUS, the EU's FDI screening regime and the UK's National Security and Investment Act adding uneven review hurdles.
The trend is sharpening governance, transparency and reputational pressures on SWFs, which operate under principles-based standards such as the Santiago Principles while balancing domestic mandates with foreign regulatory concerns.
As Western security laws tighten, can sovereign funds still deploy their trillions into critical sectors like AI and data centers?
Are sovereign wealth funds building a new global order where critical resources and national security now outweigh financial returns?
With Gulf funds targeting critical minerals, which nations will ultimately win the new US-China resource competition?
SWFs Take the Lead: $170 Billion in Direct Private Market Investments and the New Era of Global Capital Allocation
Overview
Sovereign Wealth Funds (SWFs) are rapidly increasing their influence in private markets by shifting from passive investments to more active and direct engagement. This change is driven by their pursuit of unique opportunities and a desire for greater control over their investments. Over the past decade, SWFs have moved away from traditional limited partnership commitments with large private equity funds, adopting direct and coinvestment strategies instead. As a result, coinvestments and direct investments now make up a significant portion—about 50% to 60%—of SWF private market activity, reflecting a clear trend towards more hands-on and partnership-driven investment models.