The Research On Investment Strategies And Risk Management Of Sovereign Wealth Funds

In the recent years, the sovereign wealth funds develop rapidly. It is estimated that the scale of global sovereign wealth funds around is about 2.5 trillion U.S. Dollars, which has exceeded the size of hedge funds. And with continuous high oil prices as well as the foreign exchange reserves of the emerging Asian countries accumulate rapidly, in the next few years, the size of sovereign wealth funds will grow exponentially.The sovereign wealth funds controlled by the oil and gas reserve-rich countries and emerging Asian countries carried out a series of investment in the global financial market, particularly in the Europe and United States, which accumulated a wealth of investment and management experience. Therefore, in this context, the study of the global sovereign fund's investment strategy and risk assessment has certain role of inspiration and reference on the sovereign wealth funds of our country, which contribute the future development of China Investment Corporation. This study includes the following three aspects:Firstly, the paper studies the foreign sovereign wealth funs. This paper describes the development of a global overview of sovereign wealth funds. Then, it focuses on an analysis of three representative sovereign wealth funds' investment strategy and risk management: Singapore sovereign wealth fund, the Norwegian sovereign wealth fund and Korea sovereign wealth fund. This paper sums up the characteristics of operation and management of the foreign sovereign wealth funds from the view of establishment background, investment management and risk control, which have certain reference on our country.Secondly, this paper sets up an enterprise-wide risk management system of sovereign wealth fund. From the perspective of the organizational structure and risk management processes, the paper puts forward tentative idea of construct an enterprise-wide risk management system, which includes the identification and assessment on risk factors, the control and management of risk for further analysis. On the base of these, AHP and fuzzy math theory are used to establish a comprehensive model to evaluate the risk of the investment of sovereign wealth fund. The paper selects the investment in Black Stone Company by China Investment Corporation to develop empirical studies and the result shows that the investment faces greater risk.Thirdly, combined with the domestic realities, and in accordance with foreign sovereign wealth fund's operating experience, such as the investment strategy, risk assessment and control, the paper analyze the problems of our country's sovereign wealth funds and make relevant recommendations.