Do sovereign wealth funds bring value to their investments?

Sovereign Wealth Funds (SWFs) today are major players in the global financial markets. Their rise over the past decade has attracted significant interest and controversy, fuelled by their more vivid investment targets and their role as investors and lenders of last resort at the dawn of the 2008 financial crisis. This scrutiny has led to many discussions and studies on SWFs’ value, especially to their target holdings. On one hand, SWFs could bring value through their monitoring considering their very long investment horizons and very low liquidity needs. On the other hand, SWFs’ pursuit of social goals or rent-seeking by politicians could render their monitoring role inefficient or non-existent. In a joint work with Sulaiman Albader, from the University of Illinois – Urbana-Champaign, we embark on understanding how SWFs come to play in the Kuwaiti stock market affecting specifically the corporate governance of the firm.