Are Government Owned Investment Funds Created Equal? Evidence from Sovereign Wealth Fund Real Estate Acquisitions

  • Peng Liu
  • Nathan Mauck
  • S. McKay PriceEmail author


Sovereign Wealth Funds (SWFs) are an institutional investor class about which relatively little is known. Even though they have trillions of dollars in assets under management, their (typically) highly secretive nature renders them difficult to analyze in an academic context. We utilize transactional data from the Sovereign Wealth Fund Institute to provide the first academic analysis of SWF real estate investment activity of which we are aware. To better understand this growing investor class, we compare SWFs with their most closely related institutional group, public pension funds (PPFs). While both SWFs and PPFs are state owned investment funds, we find SWFs have lower Stone and Truman (2016) best practice scores (based on fund structure, governance, transparency and accountability, and behavior.) Further, while both SWFs and PPFs show increasing levels of cross-border real estate investment, SWFs are significantly more likely than PPFs to invest across international borders. We find the percentage of SWF cross-border real estate investment to be substantially higher than the percentage of SWF cross-border investment in public and private equity documented in other studies. Moreover, in a subsample of acquisitions in the U.S., cross-border real estate investments are in locations with lower capitalization rates than domestic acquisitions for both SWFs and PPFs, and there is no discernable difference in rates across the two fund types, on average.


Sovereign wealth funds Real estate investment International real estate Foreign investment Cross-border investment Public pension funds 

JEL Classification

F21 G11 G23 O16 O18 P52 



This paper has benefited from the helpful comments and suggestions of two anonymous reviewers, Maarten van der Spek (Abu Dhabi Investment Authority) and seminar participants at University College London, San Diego State University, the 2018 ARES Conference, and the 2018 AREUEA National Conference. We also thank Xin Fang for research assistance. A portion of this study was completed while McKay Price was a visiting scholar at the University of Cambridge. All remaining errors are our own.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Singapore Tourism Board Distinguished Professor in Asian Hospitality ManagementCornell UniversityIthacaUSA
  2. 2.University of Missouri - Kansas CityKansas CityUSA
  3. 3.Collins-Goodman Chair in Real Estate FinanceLehigh UniversityBethlehemUSA

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