Launching the IFSWF 2025 Annual Review
We’re launching our 2025 Annual Review, Concentration and Convergence: Sovereign Wealth Fund Investment in an Age of Geopolitics and AI. It opens with a question that our CEO Duncan Bonfield puts squarely in his foreword: two forces, geopolitical fragmentation and a technology cycle remaking the economy, are each pulling sovereign capital towards a narrower set of transactions. For a long-term investor, that raises one unavoidable question: where, and in what, is our capital truly concentrated?
To address this, we have developed IFSWF’s first concentration index for sovereign wealth fund direct investment. Applied to geography, the picture is stark. The index rises from 0.110 in 2021 to 0.192 in 2025, the highest level in our 2018–2025 dataset, and the effective number of destination countries falls from roughly nine to just over five. The United States accounts for most of that shift, its share of disclosed sovereign capital climbing from around 28% to more than 41%.
Applied to sectors, the same index tells the opposite story. Technology has held remarkably steady at close to a quarter of disclosed direct investment value since 2018, even as it has climbed toward half of the S&P 500, so sovereign capital looks underexposed to the digital economy rather than overcommitted to it. The more interesting finding is that the category itself is dissolving. A dollar committed to an AI model developer is, traced downstream, largely a dollar in semiconductors, data centres, and electricity production and storage. Sector labels no longer reveal what a sovereign wealth fund is truly exposed to.
Three guest contributions widen the lens. Professor Bernardo Bortolotti, of the Transition Investment Lab at NYU Stern Abu Dhabi and the University of Turin, diagnoses Africa’s structural sovereign underweight: the continent hosts one in five of the world’s sovereign wealth funds but accounts for just 1.6% of global assets under management. IFSWF’s Spanish member, COFIDES, sets out how FOCO, its €2 billion co-investment fund, mobilises international capital for Spain’s digital and energy transitions. And the Fórum de Fundos Soberanos Brasileiros, with the Jain Family Institute’s Social Wealth initiative, examines Brazil’s subnational funds and what it takes to turn volatile revenues into lasting public capacity. Our warm thanks to all of them.
Member spotlight: GIC posts steady long-term returns and refreshes its framework
Singapore’s GIC published its Report on the Management of the Government’s Portfolio for 2025/26 on 24 July. The GIC Portfolio returned an annualised 5.6% in nominal US dollar terms over the 20 years to 31 March 2026. Adjusted for global inflation, the 20-year real rate of return was 3.4%, down from 3.8% the previous year.
GIC said the lower real return reflects its deliberate focus on portfolio resilience, diversification, and a somewhat lower-risk profile over the past decade. That approach can moderate returns in strong markets while helping protect against downside risk and preserve flexibility for future opportunities.
The report also said GIC is refreshing its investment framework, with a Strategic Portfolio built around Equities, Fixed Income, and Real Assets. GIC Portfolio then aims to outperform the Strategic Portfolio over the long term through active investing within approved risk limits.
“We will continue to focus on active investing, which requires the judgement to allocate capital well and with granularity, the discipline to stay diversified, and the agility to act when good opportunities arise,” said Lim Chow Kiat, GIC’s Chief Executive Officer.
The full report is available at report.gic.com.sg.
What we’re listening to
The NTMA on Ireland’s new funds. A short, practical episode of NTMA Talks, available on Spotify, in which Danielle Leece, Emily Stewart and Stephen Molloy of the Future Ireland Funds team walk through Ireland’s two new sovereign investment vehicles: the Future Ireland Fund, a long-term fund designed to meet expenditure pressures from 2041, and the Infrastructure, Climate and Nature Fund, a countercyclical vehicle that will also finance designated environmental projects between 2026 and 2030.
Sovereign Voices, episode two. In light of London Climate Action Week, the latest episode of our own podcast is now available on our website. Enrico Soddu (IFSWF) and Jonas Jølle (OPSWF) sit down to decode Hidden Currents, our sixth annual IFSWF–OPSWF climate survey, drawing on responses from 31 funds to explore how sovereign investors are moving from climate commitments to hard investment decisions. Well worth a listen.