Invesco Global Sovereign Asset Management Study
Uncover the themes shaping the future of official institutions.
This year’s key themes
In 2024, sovereign investors are navigating changing macro environments, uncertainty surrounding global elections, while more and more are embracing AI, adopting ESG practices and increasing private credit allocations. The study revealed concerns about rising US debt levels. We also examined the growing interest in emerging markets and gold.
Theme 1
Shifting investment landscapes drives changing allocations
Amid an unpredictable macro environment, sovereign investors are recalibrating their portfolios, pivoting towards equities, private credit, and hedge funds. Emerging markets are gaining traction, with funds adopting a selective approach and prioritising India.
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Theme 2
The rise of private credit: a compelling opportunity
Private credit is increasingly attractive to sovereign wealth funds (SWFs), with many investing through funds and direct deals. SWFs favour developed markets but are also exploring emerging markets, while balancing defensive and opportunistic strategies to navigate the competitive landscape.
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Theme 3
The AI awakening: sovereign investors embrace the future
Sovereign investors are increasingly adopting AI in their investment processes, recognising its potential to become an essential tool. While challenges exist, funds are investing in training and partnerships to overcome barriers.
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Theme 4
On the threshold of transition
ESG adoption continues to rise among central banks, while SWFs refine their approach as the market matures. Climate risk is recognised as a material factor, with investors aligning portfolios with global climate goals. Engagement and allocation to renewables are preferred over complete divestment to drive the energy transition.
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Theme 5
Central banks navigate uncertainty in a global election year
Amid global uncertainties, central banks are strengthening reserves. Gold’s appeal is growing due to concerns about weaponisation of the dollar and rising US debt levels. Allocations to emerging markets are increasing as central banks seek to enhance returns and mitigate risks.
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