SovereigNET - Fletcher Network for Sovereign Wealth and Global Capital

More Layers Than an Onion: Looking for a Definition of Sovereign Wealth Funds

by Javier Capapé and Tomás Guerrero


We analyze definitions used by researchers about a single concept: Sovereign Wealth Funds (SWF). It is still a matter of recent controversy and debate. We place these definitions into one of eleven categories. The results show full agreement (what we have called ‘the core’) for just two characteristics: SWFs are owned by governments and they are investment funds. Beyond the core, there are three layers commanding general consensus: SWFs are (1) international investors; (2) without explicit pension liabilities; (3) determined by the source of funding. But the debate remains open. The dynamic nature of SWFs, morphing institutions in a continuous evolution led us to conclude that there is no definition capturing the essence of these new instruments of state intervention.