Dubai: Worldwide acquisitions by sovereign wealth funds (SWFs) totalled $20.6 billion last month, nearly one-third of the total registered in 2007, according to Thomson Financial, a global financial information provider.
In January, sovereign wealth fund acquisitions accounted for 28 per cent of the total M&A activity in the United States.
Overall, investments in financial targets dominated sovereign wealth fund activity in January, accounting for 93.3 per cent of all investments in the month.
In 2006, sovereign wealth funds oversaw $44.6 billion of investments, with just 3.8 per cent coming from the financial sector.
The data suggests that the Gulf-based SWFs spent $83 billion last year on 173 deals.
According to Dealogic data, the Gulf's share last year was less than two per cent of the total global M&A.
The shrinking M&A activity in the US is largely caused by the slowdown in leveraged buyouts as a direct fallout of the tight liquidity situation.
The M&A trend in the first month indicates that acquirers in the Americas and Europe have experienced double-digit percentage declines in volume compared to last year during the corresponding period.
Conversely, buyers in Asia and the Middle East, bolstered by strong activity from sovereign wealth funds, are driving the 2008 M&A volume with increases of 214 per cent and 27 per cent, respectively, compared to January 2007.
Overall, Gulf SWFs accounted for 38 per cent of the deals by worldwide SWFs during the past 12 months.
