Sovereign investors ill-prepared for crises, finds report - Reuters

Sovereign investors ill-prepared for crises, finds report - Reuters:

Most government funds are ill-equipped to handle crises such as COVID-19 and some sovereign investors may be hit by government withdrawals, liquidity struggles and mergers even after the pandemic, a report said on Wednesday.

Managing more than $26.5 trillion of capital, sovereign wealth funds and public pension funds are among the largest global investors.

But a report by Global SWF, a financial advisory boutique specialising in sovereign funds, found that the 100 largest funds failed in resilience, a gauge of their ability to respond to crises such as market crashes, withdrawals and other risks.

“Resilience is an issue of mounting concern,” the report said. “Institutional investors still have a lot of work to do when it comes to legitimacy, discipline, spending control, strategic asset allocation and crisis management.”