Abstract:

Sovereign wealth funds that have become one of the most important financial actors of the 21st century are state-owned investment funds mostly with a long-term investment perspective and are in search of commercial return with the aim of protecting and enhancing the accumulation of wealth of the states. Considering the volume they manage, sovereign wealth funds are among the rapidly growing investors by leaving behind a large number of financial investors such as hedge funds and private equity funds. The active participation of sovereign wealth funds in the 2007-08 Global Financial Crisis has led to an increase in the interest directed to them and led to a detailed examination of such funds. The global financial crisis has also brought with it the risky view of the sovereign wealth fund activities. The risks carried by sovereign wealth funds draw much more attention than the benefits they provide since some concerns are arising about such funds. Concerns about sovereign wealth funds can be examined under three groups as political concerns, economic concerns and concerns about the transparency of sovereign wealth funds. In addition, because of a number of sovereign wealth funds are charity about declaring their activities and institutional structure explicitly, regulatory and protectionist measures needed to be taken for such funds. It is also expressed frequently that the investments of sovereign wealth funds will negatively affect the performance of companies and destabilize the financial markets. Considering the experiences in recent years about sovereign wealth funds, evidence suggests that the minority of the funds are acting for political purposes and the majority of the funds are acting with economic motives. Evidences also indicates that investments made by sovereign wealth funds contribute to the stability of financial markets and the global economy. Finally, the results show that sovereign wealth funds can affect the performance of the companies positively in which they invest.

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