Why sovereign wealth funds' money is critical for India

Sovereign wealth funds (SWF) from Gulf countries may reassess their global investments if the Iran war continues for long. India's technology and infrastructure sectors have been prime destinations for such funds. V Shunmugam explains how SWFs identify and seek value and what India can do to continue attracting these funds

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Sovereign wealth funds (SWF) from Gulf countries may reassess their global investments if the Iran war continues for long. India's technology and infrastructure sectors have been prime destinations for such funds. V Shunmugam explains how SWFs identify and seek value and what India can do to continue attracting these funds

How SWFs compare with pension funds

BOTH SWFS AND pension funds manage vast assets, but they differ in purpose. Pension funds (PF) collect retirement contributions and must pay out future pensions, so they operate under clearly defined liability schedules. This drives them toward assets that match those liabilities (e.g.bonds or stable income streams). SWFs manage national savings without fixed payouts. This grants them greater flexibility and patience. In practice, SWFs can allocate more to illiquid, high-growth assets like private equity or infrastructure.

Tenure of SWF investments